Unemployment still rising in July
|Unemployment indicator (ILO)|
(15 to 74 yrs, seasonally adjusted) (x 1,000)
|WW benefits (15 yrs to pension entitlement age) (x 1,000)|
|*The unemployment figure over July 2020 is provisional.|
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.
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.
On the one hand, more people started seeking a job (from inactive labour force to unemployed) than stopped seeking a job (from unemployed to inactive labour force). On balance, this resulted in unemployment rising by 67 thousand over the past three months. In addition, more people lost their job and became unemployed (from active to unemployed) than there were unemployed people who found a job (from unemployed to active). On balance, this resulted in unemployment rising by 39 thousand.
Between April and July, the number of people in work increased by 25 thousand. This was mainly due to a larger number of people entering the labour market who found work immediately (from inactive to active labour force) against a smaller number of people who stopped working and left the labour market (from active to inactive labour force).
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).
Every month, CBS publishes figures on the labour force in accordance with international guidelines. The corresponding indicators, i.e. the active and unemployed labour force, are used around the world to describe cyclical developments on the labour market. Monthly figures are essential in this respect. In addition, UWV issues its own monthly figures on unemployment benefits. Figures released by UWV do not correspond one-to-one with the labour force indicators. Over the past three months, the number of unemployed has risen more sharply than the number of unemployment benefits.