Jobless rate falls but young still suffering
UNEMPLOYMENT has fallen below 5% in a surprising development that adds to hope that the economic bounce-back from Covid-19 can be swift and that fears of a jobs apocalypse are overdone.
Job vacancies are up 16%, while vaccine roll-outs and the gradual end of lockdown are giving employers cause for optimism.
The black mark over the figures remains the jobs crisis among the young with cuts in hospitality — pubs and restaurants — especially acute.
The Office for National Statistics said unemployment was at 4.9% in the three months to February, down from 5% in January.
But in the year to March, 811,000 jobs were lost in the UK, with under-35s accounting for 80% of those cuts. There are 1.67 million unemployed people in Britain, down 50,000 on the last quarter but up 311,000 on a year ago. There are a further five million people still employed, but on furlough, a major headache for Chancellor Rishi Sunak.
Jack Kennedy, UK economist at job site Indeed, said: “Two surprise falls in unemployment in a row, and Britain’s jobs market is beating all expectations — for now. But there’s every danger the improvement in the headline unemployment rate could be a false dawn.
“The number of people stepping out of the labour market entirely — to become economically inactive — is creeping upwards, and the employment rate is sliding. While the impending end of the furlough scheme hangs like a spectre over the market, employers are steadily starting to hire again.”
The Resolution Foundation spoke today of a 6.2 million “Covid employment gap”, due to unemployment and furlough. Nye Cominetti at the foundation said: “This highlights the true scale of the labour market challenge ahead of us as economy reopens, that can be hidden by just looking at employment numbers.”