● The unemployment rate was unchanged in August (4.7%; Jul: 4.7%), remaining above the pre-pandemic level (Feb: 3.3%)

- Unemployed persons (-0.5% MoM; Jul: -3.6%): smallest reduction in three months with the total unemployed persons remained elevated (741.6k; Jul: 745.1k) suggesting stalling recovery in the labour market.

● Employment grew at a softer pace (0.5% MoM; Jul: 0.6%), while labour force charted a faster expansion (0.5%; Jul: 0.3%)

- Labour force: registered a fresh record high (15.9m persons; Jul: 15.8m).

- New job creation: eased to a three-month low (80.1k; Jul: 83.2k).

● Labour force participation increased to a five-month high (68.4%; Jul: 68.1%)

- Those outside the labour force shrunk for the first time in eight months (-0.7% MoM; Jul: 0.0%), as more people re-entered the labour market amid signs of a slight improvement in the economic environment.

- Job vacancies growth moderated substantially (17.8% MoM; Jun: 178.1%), reaching 37.5k in July, with the share of low-skilled jobs expanded to a two-month high (share: 45.7%; Jun: 39.8%). .

● Labour market improved among most developed economies even amid unsteady economic recovery

- US: eased for the fifth consecutive month (7.9%; Aug: 8.4%), to its lowest level since COVID-19 lockdown measures were introduced in March (4.4%).

- JP: unemployment rose to its highest level in over three years (3.0%; Jul: 2.9%), with the total unemployed persons registering at a massive 2.06m as business operations continued to be dented by the ongoing pandemic.

● 2020 unemployment rate forecast retained at 4.2% (2019: 3.3%), but with balance of risk tilted further to the downside

- The prospect of a continuous recovery in the labour market, supported by the extended Wage Subsidy Programme, is subjected to a risk of a worsening COVID-19 situation, which has already led to a series of fresh COVID-19 restrictions, interrupting business operations and weighing on revenue projections.

Source: Kenanga Research - 14 Oct 2020