Jobless claims surge by record amount as pandemic hits

LONDON » Unemployment claims in Britain jumped by a record amount in April to their highest level since the 1990s, underscoring the impact the COVID-19 pandemic is having on the economy despite government programs to keep workers on payrolls.

Treasury chief Rishi Sunak downplayed the chances of a swift recovery in a parliamentary hearing. He could not, in short, pledge to secure every job or business. An immediate bounce back is not a given.

“Obviously the impact will be severe,” he said. “We are likely to face a severe recession the likes of which we have never seen.”

Jobless claims surged by 856,000 in April, to 2.1 million, the highest since 1996 and an increase of 69% from the month before, the Office of National Statistics said Tuesday. The figures covered only the first weeks of the lockdown, said Jonathan Athow, a statistician at the ONS.

As bad as it was, economists suggested it could have been much worse. The government created a job retention program to prevent millions of people from being laid off by effectively putting them on the government payroll. Britain’s Treasury said Tuesday that 8 million people have been put on furlough schemes and that a further 2 million selfemployed people have applied for income support.

“The fact unemployment hasn’t already shot up far higher given the huge fall in GDP and temporary closure of around a quarter of businesses is a good result for the government,” said Andrew Wishart, an economist at Capital Economics. He said that reflects the fact so many people have been furloughed rather than being made redundant.

The government wage support scheme is due to ask employers to share costs from August, so job losses could accelerate if employers decide that their businesses can’t survive and give up.

Among the sectors hit hardest were hospitality and construction. Job vacancies also dropped sharply, with the number of empty posts falling by 170,000 to 637,000 in the three months to April compared with the previous quarter.