Unemployment claims rise as coronavirus lockdown rocks economy

Claims for unemployment benefit rose dramatically across the region as the lockdown took hold.

Claims for unemployment benefit rose dramatically amid the earlier stages of the coronavirus lockdown
Claims for unemployment benefit rose dramatically amid the earlier stages of the coronavirus lockdown

New figures from the Office for National Statistics showed that across the Black Country there were nearly 10,000 extra claims made last month.

Numbers claiming were up 3,320 in Sandwell to 18,535 – 9.1 per cent of the working population, 1,830 in Dudley to 14,705 (7.6 per cent),  2,150 in Wolverhampton to 16,865 (10.3 per cent), and 2,910 in Walsall to 15,170 (8.8 per cent).

Staffordshire's total was up 6,385 to 27,260 (5.1 per cent) with Cannock Chase having a rise of 955 to 3,980 (6.3 per cent),  South Staffordshire up 605 to 3,150 (4.7 per cent), Stafford up 835 to 3,670 (4.4 per cent), and Lichfield rising by 795 to 3,085 (five per cent).

Wyre Forest, including Kidderminster, had a rise of 695 to 3,685 (6.3 per cent).

WATCH more analysis across the UK

Figures for the West Midlands show the numbers claiming unemployment benefits, including Universal Credit, were up 47,305 to 265,030 (7.3 per cent).

Figures also show unemployment in the region had fallen in the three months to April.

It was down 8,000 on the previous quarter at 141,000 in the West Midlands – an unemployment rate of 4.8 per cent.

The news comes amid the announcement of job losses including agency workers at Jaguar Land Rover's plant at the i54 near Wolverhampton.

The ONS said the UK unemployment rate between February and April was unchanged on January to March, at 3.9 per cent, or 1.3 million. Economists got expectations horribly wrong, pencilling in a rise in the unemployment rate to 4.7 per cent.

Nationally, the ONS said early estimates showed the number of paid employees dropped by 2.1 per cent or 612,000 in May compared with March.

The number of people temporarily away from work, including furloughed workers, rose by six million at the end of March into April.

The ONS said jobless claims under Universal Credit jumped 23.3 per cent month-on-month in May to 2.8 million and soared 125.9 per cent or 1.6 million since March when the UK was placed in lockdown.

UK unemployment benefit claims
(PA Graphics)

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked.

"Early indicators for May show that the number of employees on payrolls were down over 600,000 compared with March.

"The claimant count was up again, though not all of these people are necessarily unemployed."

He added: "More detailed employment data up to April show a dramatic drop in the number of hours worked, which were down almost nine per cent in the latest period, partly due to a six million rise in people away from work, including those furloughed."

(PA Graphics)
(PA Graphics)

Economists believe the full impact on employment will not be felt until wage support schemes end in October.

Fiona Cincotta at Gain Capital said: "Whilst the Government’s furlough scheme offers an unprecedented amount of support to the UK labour market, we can expect to see this start to unravel in the coming months as the scheme is gradually withdrawn."

“The furlough scheme continues to hold off the bulk of job losses, but unemployment is likely to surge in the months ahead,” said Tej Parikh, chief economist at the Institute of Directors. “Wage support has given firms some much-needed time to regroup.”

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