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Unemployment rate: how many people are unemployed?

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November 14, 2020
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Unemployment rate: how many people are unemployed?
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Par Ben King
Enterprise reporter, BBC Information

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Employers reduce tons of of 1000’s of jobs as Covid-19 continues to hit the economic system.

Whereas many components of the nation have been blocked to battle the unfold of the virus, unemployment figures have risen sharply. How excessive might the unemployment charge rise?

How many individuals are unemployed?

Probably the most broadly used measure is the unemployment charge. It counts how many individuals are capable of work and need a job however can’t discover it.

The latest unemployment charge – from July to September – was four.eight%, based on the Workplace for Nationwide Statistics (ONS).

This represents a rise of zero.7% from the earlier three months, which implies that 1.62 million individuals had been unemployed.

Nonetheless, this quantity remains to be primarily based on surveys taken in earlier months and isn’t updated. A few of the information was collected in July and August, when an infection charges had been dropping and huge components of the economic system reopened.

This determine ought to due to this fact proceed to extend within the coming months.

How far might unemployment go?

Most economists count on unemployment to proceed rising for the remainder of the yr.

In its most up-to-date spherical of forecasts, the Financial institution of England stated unemployment is prone to peak at round 7.7% from April to June subsequent yr.

There was a excessive diploma of uncertainty round this forecast, with a low likelihood that it might go as much as 10%.

Nonetheless, these forecasts don’t bear in mind the federal government’s resolution to increase the vacation program till the top of March.

Why is unemployment beginning to rise?

The federal government is attempting to guard jobs with a variety of measures. Most necessary is the go away plan, the place it pays most of employees’ wages when their employers cannot. It has stored many of those individuals from changing into unemployed.

Nonetheless, the holiday program was being wound up in September and October, earlier than it was scheduled to shut on October 31.

Many firms reduce jobs in anticipation of the top of this system and from July to September the variety of layoffs rose to a document 181,000.

Layoffs

The federal government has now introduced an extension of this system for an additional 5 months, which it hopes will shield extra jobs.

The easing of foreclosures restrictions all through the summer time additionally elevated the variety of individuals thought of unemployed.

Individuals who weren’t in search of jobs throughout the first lockdown had been thought of “economically inactive” and weren’t included within the figures. However as the foundations modified, they began in search of work and had been due to this fact categorised as unemployed.

Figures from July to September noticed a document variety of individuals transfer from inactive to unemployed – 215,000.

Who turns into unemployed?

Younger individuals are one of many hardest hit teams. Figures present that 174,000 younger individuals aged 16 to 24 had been employed from July to September, in comparison with the earlier three months.

The ONS says it is because younger individuals are extra prone to work in fields resembling motels, eating places and tourism. Jobs like these have been significantly affected by the lockdown, and quarantine restrictions have decreased the variety of vacationers.

Age comparison

Are there indicators of enchancment within the labor market?

The newest official statistics seize the state of the nation forward of the announcement of a lockdown throughout England and the extension of the vacation program.

They present an image of plenty of issues getting higher, though it will not final.

The whole variety of hours labored from July to September elevated with the reopening of components of the economic system and the return to work.

The common quantity of individuals gained had fallen sharply throughout the disaster, however it elevated by 1.9% within the newest figures (excluding bonuses).

The variety of vacancies obtainable has additionally continued to extend, however there are nonetheless 35% lower than a yr in the past.

Covent Garden, London will empty the streets. Picture caption Getty Pictures Picture caption Purchasing areas that may usually be occupied are silent as a result of new locks

How many individuals are claiming unemployment advantages?

The onset of the pandemic noticed a pointy improve within the variety of individuals claiming unemployment advantages, a lot bigger than the rise within the variety of individuals counted as unemployed.

In October 2020, the variety of individuals claiming both a job search allowance or a common credit score as a result of they had been “in search of work” was 2.6 million, 1.four million greater than in March, earlier than the pandemic is simply beginning to take impact.

Nonetheless, a few of these individuals work, however with low incomes, both as a result of they’ve low wages or quick hours.

The ONS says it can’t say what number of of those individuals are out of labor or if they’re now capable of get common credit score as a result of the foundations for claiming it have modified.

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