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UK Unemployment Claims Increase Again in July, After Declining in June

Posted Tuesday, August 11, 2020 by
Skerdian Meta • 2 min read

The unemployment claims surged in theUK during the lock-down months. They increased by more than 1.3 million during April and May, while the total number of people loosing their job during the pandemic shoot to 730K. But last month’s report showed that claims turned negative in June, declining by 28K, which was revised to 68K today.

Claims were expected to post a 9K increase in July, but they surged to above 94K, so the employment sector is not back to where it was before the coronavirus and i think that it will take time until it gets there. But, the unemployment rate is not moving at least. Below is the report for July:

UK July Employment Report

July jobless claims 94.4k vs -28.1k prior
June jobless claims -28.1k; revised to -68.5k
Claimant count rate 7.5%
June claimant count rate 7.3%; revised to 7.2%

June ILO unemployment rate 3.9% vs 4.2% expected
May ILO unemployment rate 3.9%
June employment change -220k vs -300k expected
May employment change -125k

June average weekly earnings -1.2% vs -1.1% 3m/y expected
May average weekly earnings -0.3%
June average weekly earnings (ex bonus) -0.2% vs -0.1% 3m/y expected
May average weekly earnings (ex bonus) +0.7%

Slight delay in the release by the source. It is tough to really make sense of the figures here considering that the UK government furlough program is still largely masking underlying conditions in the economy and the labour market. Jobless claims increased in July after a marked decrease (better revision) in June and the unemployment rate at the end of Q2 is still holding relatively steady. But the change in employment is rather large though (Q2 drop biggest since 2009).

ONS says that survey data shows employment is weakening and unemployment is largely unchanged because of increases in economic activity. On a side note, wage growth continues to dig deeper into negative territory and that doesn’t bode well for price pressures in general and will be a point of concern for BOE policymakers down the road if the trend persists into late Q3 and Q4.

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