We're regularly told that we've not yet really felt the full impact of the pandemic, and that pretty soon now, we're going to realize that it's going to leave behind a tide of unemployment which will kill the rebound in the short term, and scar the economy for years to come. And I have to say that on the face of it, that's plausible - it could happen.
My hope that it won't has two supports: first, the lockdown wasn't a 'recession', it was (merely) a medical/social emergency; second, the downside of the flight from the urban economy is unavoidably visible to reporters and analysts, whilst the positive impact on smaller towns and villages is not. If economies are being restructured (and they are), as rise in frictional unemployment is inevitable. But that's not the tsunami we are told to fear.
And so on to the UK's labour market data for July. Here's the spoiler alert: although July's headline unemployment rose, the report contained the first coherent and plausible evidence that UK labour markets are beginning to recover. Crucially, employment is rising, particularly full-time employment by companies; inactivity is falling; vacancies are rising; and early data for August from PAYE data also confirms that employment is continuing to rise.
