Although March data doesn’t reflect the reality of lockdown, April’s early numbers are a sign of things to come
UK unemployment increases by 856,500
- UK jobs data published this morning isn’t reflective of the current situation
- There was a rise of 856.5k new claims, although this is less than the feared 1.2mn
- Claims will no doubt have been tempered by furlough programmes and the Government’s attempts to prevent people from permanently losing jobs
- Many expect we will see the unemployment rate reach near 10% next month
Much like last week’s GDP data, the UK jobs data published this morning isn’t reflective of the current situation faced by consumers and businesses. March’s unemployment rate of 3.9% was actually a fall from 4.0% in February and given that the lockdown started on 23 March, the majority of those who lost their jobs wouldn’t have had confirmation and then claimed unemployment until April.
However the April claimant count is likely to be a sign of things to come. There was a rise of 856.5k new claims, less than the feared 1.2mn, and claims will no doubt have been tempered by furlough programmes and the Government’s attempts to prevent people from permanently losing jobs. Upon release of the data, Sterling made gains of around 0.5% and the stock market is likely to add to yesterday’s astonishing gains according to the futures markets, as we had braced ourselves for a gloomier result.
Yet, markets and investors are bracing themselves for the near certainty that the next set of jobs data will be horrible, along with other economic indicators to show that we are facing the worst economic conditions in living memory. Many expect we will see the unemployment rate reach near 10% next month and I fear it may stick at elevated levels for longer than we had believed at the start of the crisis, given how many companies and small businesses are likely to fail along the way.
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