[THREAD] The UK labour market has been profoundly affected by the pandemic. The effects, however, have been complex and different from how the financial crisis played out. Six key points from today’s @ONS data:
Firstly, people are losing jobs and employment is falling. But the falls are relatively modest compared to the huge falls in GDP we are seeing (GDP fell by just under 20% in the three months to May YoY; payrolls fell just over 2% July YoY). (1/n)
The number of people on the payroll fell by just over 100,000 in July and is down 700,000 since March. (2/n) 
Secondly, a key reason for why the fall in employment is less than the fall in GDP is that many people have been furloughed and/or seen their hours reduced. Up to 5 million people in total looked to be furloughed in June. (3/n)
Total hours worked is just under 20% down on pre-pandemic levels. We have also seen an uptick in the number of people underemployed – those who want more hours of work. (4/n)
Part of that furloughing picture includes just under half a million people between (Apr-Jun) who tell us they are employed, but away from work and not being paid. (5/n) blog.ons.gov.uk/2020/07/16/a-c…
The reduction in hours means weekly wages are falling for many people, so some people who are employed are at risk of financial hardship, in addition to those who are no longer in work. (6/n)
Thirdly, we are not seeing a rise in unemployment, but rather an increase in economic inactivity, which includes those who are not looking for work (though they may still want a job). (7/n)
Increasing economic inactivity is concerning as it could lead to people losing contact with the world of work. (8/n)
Also, the increase in economic inactivity has been greatest for (broadly) economic reasons. The number of people economically inactive because of caring responsibilities, etc. is continuing to fall. (9/n)
Fourthly, worklessness is rising among groups that we might worry about. Younger and older works, and those in less skilled jobs, are seeing falls in employment. These people might face greater barriers to getting back into work in the future. (10/n)
Fifthly, the demand for workers as shown by the number of vacancies saw big falls when the pandemic started. (11/n)
There is a glimmer of good news as we have seen a small rise in vacancies, with sectors like hospitality seeing increases as the sector reopened. But overall vacancies remain low. (12/n)
Lastly, where does this leave us? There is great uncertainty at the moment and the labour market remains in something of a ‘holding pattern’ with fewer people starting or leaving work. (13/n)
At the same time, the furlough scheme has kept many people at risk of losing their job connected to their employers. (14/n)
As the furlough scheme unwinds and employers adjust their plans in the light of withdrawal of the furlough scheme and further economic developments, we might see some bigger changes in the labour market over the coming months. (15/n)
