Jonathan Athow, deputy national statistician for economic statistics at the ONS, said of the latest unemployment figure: “While only covering the first weeks of restrictions, our figures show Covid-19 is having a major impact on the labour market.
“In March employment held up well, as furloughed workers still count as employed, but hours worked fell sharply in late March, especially in sectors such as hospitality and construction.
“Through April, though, there were signs of falling employment as real-time tax data show the number of employees on companies’ payrolls fell noticeably, and vacancies were sharply down too, with hospitality again falling steepest.”
UK unemployment claims soared by more than 69% in April after the coronavirus lockdown gripped the labour market, official figures revealed.
The Office of National Statistics (ONS) said that jobless claims under Universal Credit surged by 856,000 to 2.1 million in April, compared with the previous month.
Official statisticians also said that early estimates for April 2020 indicate that the number of paid employees fell by 1.6% compared to March, as firms began to feel a greater impact from the lockdown.
Job vacancies also significantly decreased, with the number of empty posts in the three months to April diving by 170,000 to 637,000, compared to the previous quarter.
Economist Sir Christopher Pissarides warned hours of work figures “fell catastrophically” while vacancies figures showed the labour market “more or less stopped functioning”.
The London School of Economic academic told BBC Radio 4’s Today programme employment figures are “not as bad”, but added: “Hours of work figures fell catastrophically.
“And also vacancies fell which shows the labour market more or less stopped functioning at the beginning of the lockdown.”
Tej Parikh, Chief Economist at the Institute of Directors, said: “Even before lockdown, coronavirus was threatening to take the shine off the UK’s sterling jobs record, and initial estimates for April don’t make for easy reading. It’s clear that without the Government’s furlough scheme, the picture would have rapidly deteriorated even further.
“While furloughing is holding off some job losses for now, it’s not yet clear how firms will react as the scheme changes in August and as social distancing continues. Many companies will still be in the middle of a cashflow crisis, and will struggle with any cost increases. Government faces an onerous task in winding down the scheme without causing too much pain.
“The UK’s dire productivity record is one thing that can’t be put down to the pandemic. In fact, many businesses have been innovating more than ever in response to the lockdown. As firms get up and running again, money will be tight, and widespread debt will hold back new projects.
"The Government should seek to spur investment through tax incentives, otherwise companies will be slower to adapt to the new normal, and our productivity performance will remain in the doldrums.”
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