Economist's view: job market shows remarkable resilience but younger people hit hardest
Commenting on today’s ONS Labour Market data, Nitesh Patel, Strategic Economist at Yorkshire Building Society, said:
Given the record-breaking contraction in GDP this year, the labour market appears to have shown remarkable resilience. The official International Labour Organisation (ILO) unemployment rate has risen from 4.0% in February to just 4.9% in October - edging up from 4.8% last month. This increase was expected given that the Coronavirus Job Retention Scheme was expected to end on 31 October.
The more timely HMRC Payroll data show that unemployment rose by 819,000 between February and November. Increasingly and worryingly, we can see that the younger people, specifically those aged 18-24 and at the beginning of their careers, are bearing the brunt of the decline. This is partly because many work in high street retail, hospitality and leisure sectors, which have been amongst the hardest hit by lockdowns and social distancing measures.
Unless a vaccine significantly improves the outlook for activity, particularly in sectors which have been hit hardest, the furlough scheme may only delay the inevitable job losses.