Unemployment still rising in July

Higher employment and unemployment in July

In the past three months, the size of the labour force (the active and unemployed labour force combined) increased by 44 thousand people monthly on average. This increase followed a sharp decline in the size of the labour force in April, after the outbreak of the coronavirus crisis. The labour force grew more significantly in June, while modest growth was recorded over July. This was largely related to an increase in the number of unemployed.

More unemployed

In order to enable comparison of cyclical movements in the labour market between countries, the unemployment indicator of the International Labour Organisation (ILO) is often taken as a measure. According to this indicator, the ‘unemployed’ includes all 15 to 74-year-olds who do not have paid work but who have been looking for paid work recently and who are immediately available. There were 419 thousand unemployed in July, equivalent to 4.5 percent of the labour force. It stood at 4.3 percent in the previous month.

UWV: number of unemployment benefits stabilising

The number of current WW benefits in July remained the same compared to June. At the end of July, UWV provided 301 thousand unemployment benefits. After a sharp increase between March and May, the number of WW benefits remained stable for a second consecutive month. However, in July 61 thousand more WW benefits were provided compared to last February.
Among the younger age group - 15 to 24 years - the number of current WW benefits dropped by 10 percent relative to June. Almost half of all WW benefits for young labour force participants which were terminated in July had reached their maximum duration (i.e. approximately 4.3 thousand WW benefits). The number of young WW benefit recipients rose sharply due to the coronavirus crisis, especially over March and April. In general, their entitlement is short-term (maximum 3 months) because they have not yet built up a long employment history.

UWV: number of new WW benefits structurally high since March

In July, 8.7 thousand new WW benefits were granted each week, i.e. an increase of almost 50 percent relative to July 2019. Since March, the number of new WW benefits has been structurally higher than one year previously. The largest increase in the number of new benefits since then was in April, at an average of 14.7 thousand new benefits weekly.

More people seeking work again

Over the past three months, unemployment rose by over 100 thousand. This rise is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

Job losses the major cause of rising unemployment in March-June

The diagram of June shows that unemployment was still rising between March and June due to the higher number of people losing their job (from active to unemployed).

On the other hand, the number of people entering the labour market and finding work immediately (from inactive to active labour force) was still much lower, while the number of people in work who left the labour market was higher instead (from active to inactive labour force).