Official figures from the Office of National Statistics (ONS) have shown the largest decline in employment in the UK in over a decade between April and June.
According to the ONS, employment in the UK has fallen by the largest amount in more than 10 years during the period. The number of workers in the country fell by 220,000 during the quarter.
Fall of UK employment
This was the largest decline in a quarter since May to July 2009, at the height of the global financial crisis. The ONS identified the youngest workers, oldest workers and those in manual occupations as the hardest hit due to the coronavirus pandemic.
The ONS numbers did not include people who are furloughed, those on zero-hours contracts but not getting shifts, or people on temporary unpaid leave from a job, since they are stilled considered employed.
This means that the figures did not exactly capture the entirety of the pandemic's impact on employment. This is evident in the UK unemployment rate, which is estimated at 3.9%, which is largely unchanged compared with last year and the previous quarter.
ONS deputy national statistician Jonathan Athow said: "The groups of people most affected are younger workers, 24 and under, or older workers and those in more routine or less skilled jobs."
"This is concerning, as it's harder for these groups to find a new job or get into a job as easily as other workers," Athow added.
Forecasts on UK unemployment
While the country has suffered due to the pandemic, unemployment has not ballooned as expected because numerous companies have furloughed staff.
However, analysts are expecting unemployment to worsen in the next few months as scheme wound down, warning of a looming "cliff-edge" and a "lull before the storm".
Many UK firms, from restaurants to retailers, have already laid out plans to cut jobs. In June alone, there have been 140,000 redundancies announced.
Additionally, ONS reported that the number of average hours worked continued to fall in April to June, reaching record lows both on the year and on the quarter. From March to July, the number of people claiming universal credit increased by 117% to 2.7 million.
In the US
Meanwhile, in the US, an additional 1.48 million more people filed for unemployment across the US at the end of June as the coronavirus pandemic continues to hit the economy and infection rates increased.
Claims for unemployment insurance have declined for 12 weeks in a row, but are still historically high. Around 47 million people made the filing for benefits in the last 14 weeks, with 3 million claims processed in the last two weeks.
Nicholas Juhle, head of economic research at Greenleaf Trust, explained that a backlog of claims may be contributing to the still big number of weekly claims. Before the pandemic happened, the biggest weekly claim on record was 695,000 in October 1982.
“The big question now is how much of this do we get back,” said Juhle. “It could take a couple of months before we get a clearer insight.”
However, nonfarm payrolls in US rose by 4.8 million in June while unemployment rate fell to 11.1%, according to the Labor Department. Economists polled by Dow Jones had been predicting a 2.9 million increase and an unemployment rate of 12.4%.
The figures reflect the activity in different states as they gradually reopen their economies. Wall Street gave a positive reaction to the report, with futures showing a more than 400-point gain at the open.
