Record 300,000 jump in unemployment expected

Live register figures, published on Thursday, are expected to show a record 300,000 jump in the number of people claiming unemployment benefits as a result of the coronavirus-related shutdown.

The unprecedented monthly increase for March is expected to lift the seasonally-adjusted total to an all-time high of 482,000, according to a calculation by Goodbody Stockbrokers, which corresponds to roughly a fifth of the working population.

At the low point of the previous crash in 2012 there were about 470,000 claimants on the register.

As people with part-time work can claim benefits, the live register is not an accurate gauge of the unemployment rate but it does track movements in the labour market.

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Benefit

There is also a question mark over whether those being paid the new pandemic unemployment benefit or those in receipt on the new Covid-19 wage subsidy should counted as “unemployed”.

Nonetheless Goodbody analyst Dermot O’Leary said the figures would reveal “the stark impact on the Irish labour market of efforts to contain the outbreak”.

Including the new unemployment benefit recipients, Goodbody estimates that the Republic’s unemployment rate may have risen to 17 per cent in March, up from 4.8 per cent in February.

Mr O’Leary said he expected a further increase in unemployment in April as a result of the new restrictions imposed on March 27th aimed at flattening the spike in new cases of the disease.

Restrictions

“At this point, we do not know when economic life will be allowed to restart and thus how long double-digit unemployment will persist,” Mr O’Leary said.

He also cautioned that when pubs, shops and hotels reopen the recovery in employment would not be instant and may “take years”.

" Like other economies, Ireland is no different in relying on the advice of epidemiologists and health professionals as a key input into when restrictions will be removed and thus what shape economic recovery will ensue," he said.

"Given the experience of other countries, particularly China, we would be of the view that a full removal of the restrictions in developed economies is unlikely any time soon," he said.

“When restrictions are loosened, they will be differentiated by sector and possibly region too. This makes a V-shaped recovery unlikely in our view,” Mr O’Leary said.