Coronavirus: Earnings growth and vacancies fell ahead of lockdown
Key elements of the latest data suggest a better picture than economists were expecting in the early days of the virus crisis.
Tuesday 21 April 2020 11:15, UK
Official figures have highlighted a fall in earnings growth and job vacancies in the run-up to the coronavirus lockdown that is expected to cripple the labour market.
Data released by the Office for National Statistics (ONS) also showed the number of people in work growing more slowly and the jobless rate rising slightly to 4% from 3.9% in the three months to February.
Monthly unemployment benefit claims rose by 12,500 in the month to 12 March, a fortnight before the lockdown began, though economists had predicted a far higher surge.
The figures showed the number of job vacancies fell by 52,000 to 795,000 during the three months to March - the first quarter of a year which is expected to result in a contraction for the UK economy given the start of the COVID-19 crisis.
The proportion of people in work hit a new record high at 76.6% - but that covered the period from December to February when wage growth was also found to have slowed.
It hit an annual rate of 2.8% in the period - its weakest since the three months to August 2018 and down from the previous figure of 3.1%.
When bonuses were stripped out, pay growth was the slowest since July 2018 at 2.9%.
Separate figures, also released by the ONS, showed growth in the number of people on companies' payrolls slowed to 0.8% in March from 1.1% in February.
ONS labour market statistician David Freeman said: "These experimental statistics show a softening picture in March, but cover the month as a whole including the period before the coronavirus restrictions were in place."
The lockdown is expected to prove catastrophic for the labour market given earlier ONS predictions that a quarter of businesses had shut down completely by early April.
The Office for Budget Responsibility released a scenario last week that suggested the jobless rate could rise as high as 10%, with an extra two million people losing their jobs under a three-month lockdown.
The government has responded, along with the Bank of England, to provide financial support for businesses and workers alike in a bid to limit the damage.
It was announced on Monday night that pay claims covering more than one million workers under the Job Retention Scheme were lodged with HM Revenue and Customs on the first day for applications.
Howard Archer, chief economic adviser to the EY ITEM Club, said: "The March labour market data being markedly better than expected does not dilute the importance of the government's Coronavirus Job Retention Scheme and its implementation.
"It is difficult to judge just how many jobs will be lost over the coming weeks. Clearly, much will depend as to whether the vast majority of furloughed workers ultimately return to their jobs."