UK Unemployment : A Good News Story?

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The latest ONS release saw UK unemployment reach 3.7%, the lowest since 1973 and a new a record low for the number of people unemployed between 6 and 12 months. As the ONS points out, this downward trend is one that we have been seeing since 2013 and has continued it's trajectory as Covid restrictions are lifted. The majority of the increase in payrolled employees in the year to April 2022 has been in the accommodation and food services industry which is also the sector that was most hard-hit by Covid restrictions.

In the graph above we can see that peak employment numbers were reached at the dawn of the Covid outbreak in Q1 2020 with a drop in employment figures that has been steadily improving from its trough in Q1 2021. A year on from there we can see the beginning of a flatline of cumulative growth in the last three quarters. This is largely due to the missing circa 450,000 workers that have left the labour market so are neither reflected in the employment or unemployment figures hence the low unemployment rate reading released this morning however these workers are slowly returning back to the labour market. 

If we take a look at the breakdown by industry sector the latest data set provides us with some indicators as to how the pandemic has impacted the makeup of labour market in the UK.  

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