After a bruising couple of weeks, the government was in need of some good news and that was provided by the latest jobless figures. Fears that the end of the furlough scheme would lead to rising unemployment have proved groundless.
It is, of course, early days. There are still only flash estimates of what happened in October once the Treasury’s wage subsidies had come to an end but the signs are promising.
But rather than the expected surge in redundancies as firms had to cope without government financial support, there was a 160,000 rise in the number of payrolled employees. In the three months from August to October the number of job vacancies hit a new record of close to 1.2m – up almost 400,000 on the pre-pandemic level.
The Office for National Statistics said in the July to September period – the months leading up to the scrapping of the furlough – the number of people moving from job to job was higher than ever before, but this was the result of choice rather than people being forced to move because they had been dismissed.
Rishi Sunak said the figures were tribute to the “extraordinary success” of the furlough and few would dispute that claim. The unemployment rate fell by 0.5 percentage points to 4.3% in the three months to September and is only marginally higher than it was when Covid-19 arrived in early 2020.
Some of the workers who came off furlough in October may have gone into part-time rather than full-time jobs, but even so the labour market has shown resilience throughout the pandemic.
Andrew Bailey, the governor of the Bank of England, said on Monday that he wanted to see what was happening to employment post-furlough before deciding whether to support higher interest rates. Nothing in the official data suggests the City is wrong in its belief that borrowing costs will rise from 0.1% to 0.25% next month.
Indeed, the economy as a whole is now starting to go post-Covid. The inflation figures due out on Wednesday will still show the impact of the virus on global energy prices and on supply chains but in other respects it is as if the past 18 months never happened.
There are two sides to that. The good news is that the labour market has emerged relatively unscathed. The bad news is that the problems of February 2020 – low investment, low productivity, weak underlying growth – are problems that remain to be tackled in November 2021.