The UK’s jobs recovery has continued into June, with four regions of the UK now surpassing their pre-crisis payrolled employment levels. However, some of these workers will still be on furlough – highlighting how the recovery remains far from complete – the Resolution Foundation said today in response to the latest ONS labour market data.
With the grand reopening of the economy on 17 May sparking a major return to work in May, the latest data shows that the momentum of the jobs recovery has continued into June, even while other economic indicators – such as footfall and mobility – implied a slowdown in growth.
Payrolled employment in June is up 356,000 on-the-month, and is now just 206,000 below pre-crisis levels.
Encouragingly, the North West, North East, East Midlands and Northern Ireland now have higher payrolled employment levels than pre-crisis. The Foundation notes however that broader but less timely employment data paints a less positive picture for the North West. The region had the biggest overall employment fall – including the fall in self-employed workers not captured in payroll data – in the three months to May.
The jobs recovery also looks to be broad-based with vacancy levels rising in most sectors of the economy. The Foundation notes that despite warnings of job shortages, these vacancies are being filled relatively quickly – with flows into employee jobs currently at record levels.
The Foundation says that this recent data is very encouraging, but cautions that the jobs recovery is far from complete. The UK still has a ‘Covid employment gap’ of around 2.7 million workers, due to lower overall employment, including self-employed workers, compared to pre-crisis and staff still on full or partial furlough.
The Foundation calculates that total hours worked in May were still around 4.4 per cent lower than pre-crisis – a gap larger than the peak of the 1990s recession.
It adds that policy makers’ attention should be focused on the Autumn where the end of the furlough scheme is still expected to prompt job losses, and the severe cut in unemployment support will mean deeper hardship for those losing their jobs.
Nye Cominetti, Senior Economist at the Resolution Foundation, said:
“The momentum generated by the return to work surge in May has continued into June, with much of the North now within touching distance of pre-crisis employment levels.
“Encouragingly, the jobs recovery is broad-based with vacancy levels rising in nearly every sector of the economy.
“But these encouraging signs must not breed complacency among policy makers. The UK’s jobs recovery is far from complete, and big challenges lie ahead as the spread of the virus continues, and the furlough scheme ends in October – just as unemployment support is set to be cut.”