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Latest labour market data paints gloomy outlook for Wales

May 19th 2020

Steffan Evans reflects on what the the latest labour market data tells us about how Coronavirus is impacting on jobs in Wales

May 19th saw the Office for National Statistics release its latest labour market and claimant data. The data suggests that the Coronavirus outbreak is starting to have an impact on employment in Wales.

Out of work benefits

The latest claimant data shows a spike in unemployment as Coronavirus hits jobs hard. Provisional data until April 2020 shows that the claimant count in Wales, (the number of people claiming benefits principally for the reason of being unemployed) has doubled compared to April 2019, standing at 6.8%. Nearly all the increase has come over the past month, with the provisional claimant count being three percentage points higher than March 2020. The spikes comes on top of worrying sings that the Welsh Labour Market is slowing down.

The labour market data

The labour market data released on May 19th had been much anticipated given that it covered the period between January and March 2020. This would be the first data available that would cover a part of the period in which lockdown measures had been introduced to control the spread of Cornavirus. Given that lockdown measures were only put into place on March 23rd, the next data released in June 2020 are likely to provide a clearer picture of the impact of Coronavirus on the labour market in Wales. The available data provide some indications as to the impact that Coronavirus has had on the job market in Wales, however, and paints a gloomy picture for what we can expect over the next few months.

The unemployment rate

Despite the sharp increase in the number of people claiming out of work benefits in April 2020, the labour market survey data shows that the unemployment rate in Wales had actually reduced in the 3 months to March 2020 compared to the same period in 2019. Between January and March 2019 the unemployment rate in Wales stood at 4.7% for 16-64 year olds. Between January and March 2020 this figure had dropped to 3.3%. Over the same period however, the data on economic inactivity and on the employment rate paint a less positive figure.

Employment and economic activity are falling

The employment rate in Wales stood at 74.3% in the 3 months to March 2020. In March 2019 however, the employment rate was 1.1 percentage points higher, at 75.4%, for 16 to 64 year olds. Across all age groups, this means that there are nearly 20,000 fewer people in work in Wales than the same period the previous year. The change in economic inactivity is even more stark. Whilst 20.9% of people were economically inactive in the 3 months to March 2019, this figure had increased to 23.2% in March 2020, meaning that there are approximately 44,000 more 16 to 64 year olds in Wales who are not in work or who are not looking for work.

The next round of data will be released on June 16th.  The Bevan Foundation will, thanks to your support, continue to monitor the latest information to provide an accurate picture on how the Cornavirus pandemic is impacting on Wales.

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