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Employment rate remains at 76.5%

The Office for National Statistics has released the latest employment figures for the three months between November 2019 and January 2020. The UK employment rate remains high at 76.5%; this is up 0.4% on the previous year and 0.3% on the previous quarter. The UK unemployment rate rose slightly from the previous quarter, up 0.2% to 3.9%. The figures were fairly similar compared to the previous year.

It is estimated that 32.99m people were in employment, up 271,000 on the previous year. This increase was driven by full-time workers (up 345,000 on the previous year), women in employment (up 262,000) and workers aged between 50 and 64 years (up 168,000). There was a decrease in the number of part-time workers (down 127,000).

An estimated 1.34m people were unemployed for November 2019 to January 2020. This is up 5,000 on the previous year.

The economic activity rate fell to a record low of 20.4%, down 0.3% on the previous year and down 0.4% on the previous quarter. For the three months for November 2019 to January 2020, there was an estimated 8.43m people aged 16 – 64 years that were deemed economically inactive.

Pawel Adrjan, UK economist at Indeed, commented, “There’s more than a touch of Alice in Wonderland about these jobs figures. They paint a broadly rosy, but now hopelessly outdated, picture of a labour market which is having to adapt to a completely new reality. 

“January’s joint record high employment rate and the record low inactivity rate - two metrics which show a labour market in rude health - are now likely to be high water marks.

“But for all the fears of trouble ahead, businesses are still hiring, and the numbers of vacancies currently live on Indeed are broadly similar to where they were this time last year.

“Crucially the types of jobs employers are recruiting for have changed, as the economy adapts to the challenges imposed by the Coronavirus.

“Perhaps unsurprisingly there has been an unseasonal fall in vacancies in the hospitality and travel sectors - two areas most immediately impacted by the virus restrictions.

“Conversely there has been a surge in job postings for delivery drivers and warehouse workers - as retailers restructure their supply chains to take food and goods direct to the thousands of people now spending more time at home."

Tom Hadley, director of policy and campaigns at the Recruitment & Employment Confederation (REC), said, “With the coronavirus situation changing every day, it’s essential for businesses and government to be looking forward, rather than backwards at these obsolete figures. Four in five recruiters expect the outbreak to have an adverse impact on hiring in the short term, and we are likely to see the greatest impact in sectors like hospitality, retail and the creative industries. However, the health, social care and logistics sectors have been looking for even more staff in the past few weeks. Recruiters and temporary agency workers have a vital role to play if employers are to keep up with demand.

“We welcomed the emergency support for workers and businesses that was announced in last week’s Budget – but we need bigger, bolder action to protect good companies from cashflow problems that weren’t their fault. This means covering sick pay, deferring VAT and PAYE payments, and suspending the upcoming tax changes until normality resumes. This will help to keep people in their jobs and allow firms to start hiring again.

“In return, businesses must also take a proactive approach to both protecting their staff and preparing for a future where we will all have to be more flexible about the ways we work.”

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