There were glimmers of hope for the UK labour market today with payroll numbers rising and unemployment holding steady at five per cent.
The latest figures show 68,000 more people were on payrolls in February, with the rise now 200,000 over the past three months – although the numbers are still down nearly 700,000 since the start of the pandemic.
Meanwhile, the unemployment rate stood at five per cent in the three months to January, according to the Office for National Statistics – barely changed from the previous quarter.
However, worryingly the increase in job vacancies has slowed and is still well below pre-pandemic levels.
The latest figures show 68,000 more people were on payrolls in February, with the rise now 200,000 over the past three months – although the level is still down nearly 700,000 since the start of the pandemic
The unemployment rate was 5 per cent in the three months to January, according to the Office for National Statistics
The update was published on the year anniversary of the UK being plunged into the first coronavirus lockdown.
ONS head of economic statistics Sam Beckett said: ‘After yet another monthly increase, there were almost 200,000 more employees on payroll in February than three months earlier, although that is still nearly 700,000 down from the start of the pandemic.
‘Of the decrease since then, almost two-thirds has been among the under-25s, over half has been in hospitality, and almost a third has been in London.
The Bank of England has suggested unemployment will peak at a lower level than the 7.8 per cent it previously feared, after Rishi Sunak moved to extend the Government’s huge furlough scheme until September.
Overall there were 693,000 fewer workers on payrolls than in February 2020, with more than half – 368,000 jobs – lost in the hospitality sector as lockdowns and restrictions hammered the industry.
The ONS added that 123,000 payroll jobs were also lost in the hard-hit retail sector while more than 60 per cent of the total fall over the past year was for those aged under 25 in a sign of the toll taken by the crisis on young workers.
The latest figures show the rate of unemployment stood at five per cent between November and January, down from 5.1 per cent in the previous three months.
Total unemployment stood at 1.7 million between November and January, up 360,000 over the year, the ONS said.
The figures show a slight improvement since the start of the pandemic, with 601,000 vacancies between December and February.
This is 26.8 per cent lower than a year earlier but the decline has eased steadily from a near-60 per cent drop last summer, though the ONS said the rate of improvement has slowed in recent months.
Official figures published earlier this month showed the economy contracted by 2.9 per cent in January as the lockdown took its toll.
However, this was less than feared and a far cry from the double-digit fall of last April at the height of the first wave of coronavirus.
The Office for Budget Responsibility (OBR) recently revised down its forecasts for unemployment to peak at 6.5 per cent by the end of the year – down from previous estimates made in November of 7.5 per cent.
This would equate to 340,000 fewer people out of work than previously thought thanks largely to the decision to extend furlough.
Responding to the latest jobs statistics, Mr Sunak said: ‘Coronavirus has caused one of the largest labour market shocks this country has ever faced, which is why protecting, supporting and creating jobs has been my focus throughout this crisis.
‘We have taken decisive action with a £352 billion package of support.
‘The continued success of the vaccine rollout provides us with hope for the future and, through our Plan for Jobs, we will continue to support people throughout the months to come.’