Payroll employment in the UK surged by over 200,000 in May, owing to the country’s hiring boom. However, the UK still has a 2.8 million-strong ‘Covid employment gap’ to bridge before the recovery is complete, the Resolution Foundation stated in reaction to the latest ONS labour market figures.
The most recent ONS figures indicate that the “grand reopening” on 17 May contributed to an increase of over 200,000 in payrolled employment, while independent ONS statistics indicate that the number of furloughed workers decreased to about two million in late May.
The improving labour market was also evident in the number of job openings, which increased to 881,000 in May, surpassing pre-crisis levels, while the unemployment rate continued to decline, falling 0.3 percentage points to 4.7 per cent in the preceding three months.
While positive, the Foundation notes that the UK’s Covid recovery is far from complete. It states that the UK still had a 2.8 million-strong ‘Covid employment gap’ at the end of May, with workers either totally or partially furloughed or out of work entirely.
While this deficit has narrowed significantly from over 6 million in February, the task will be to close it completely before emergency assistance is phased out on 1 July.
Nye Cominetti, Senior Economist at the Resolution Foundation, said: “The grand reopening in May has led to a grand hiring surge as people return to work.
“The sheer pace of the recovery is inevitably leading some employers to struggle to recruit, though this should ease in the coming months.
“But while this welcome hiring surge is rapid, it is also far from complete, as the UK still has a Covid employment gap of almost three million workers.
“With emergency support starting to be phased out over the next few weeks, and ended completely by October, this gap will need to be closed a lot more to prevent a worrying rise in unemployment later this year.”