Unemployment in Wales: Slight rise to 3.1%

The rate of unemployment in Wales in May to July rose slightly compared with February to April to 3.1%.

The quarterly figures from the Office for National Statistics (ONS) suggest the number of people in employment in Wales fell by 5,000 over the quarter.

Compared with the same time last year there were 2,000 fewer jobs.

The UK unemployment rate of 4.1% is the highest for two years - the biggest fall in employment was among those aged between 16 and 24.

After Northern Ireland, Wales had the second highest rate of economic inactivity at 22.9%, up 0.6 percentage points on last year.

These are people of working age not looking for work because they are full-time carers or students, they are on long-term sick, or they have taken early retirement.

The figures do not include the millions of people who are furloughed, those on zero-hours contracts but not getting shifts, or people on temporary unpaid leave from a job, as they still count as employed.

In June, 316,500 employees in Wales were paid 80% of their salaries under the UK government's furlough scheme, figures from the Treasury showed.

Some 695,000 UK workers have disappeared from the payrolls of British companies since March, when the coronavirus lockdown began.

Young people have suffered the biggest fall in employment

CBI Wales said the figures for Wales "broadly mirrors" the rest of the UK and called for a "successor" to the furlough scheme - the Job Retention Scheme (JRS) - that is due to end on 31 October.

"Easing of lockdown restrictions and a more flexible JRS in July have led to signs of stabilisation in vacancies and hours worked," said director Ian Price.

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"But across the UK, rising redundancies, creeping unemployment and a record fall in the number of young people in work are clear warning signs.

"Looking ahead, a successor to the Job Retention Scheme is needed to protect jobs and businesses."

Analysis from BBC Wales economics correspondent Sarah Dickins

Although not dramatically, unemployment has now started to rise in Wales.

That is while 400,000 employees in Wales have been off work on furlough.

The big question is how many of them will have a job to return to when the scheme ends in October. It will be the end of the year before we know the extent of that.

Comparing the figures up to July with those up to April in Wales, unemployment went up 1,000.

Another way of looking at what's happening in workplaces is to see how many people are on employer payrolls and that is down 695,000 across the UK since coronavirus hit in March.

It is a relief that unemployment has increased at a slower rate in Wales than the UK as a whole.

But even when there has been strong growth in the UK economy it has sometimes just taken longer to reach Wales. That could now be happening with unemployment.

Ken Skates said the Welsh Government has backed businesses, workers and those looking for jobs or training

Economy Minister Ken Skates said it was "encouraging" that Wales' unemployment rate was below that of the rest of the UK.

However he added it was "crucial" the UK government extends the furlough scheme.

"We continue to do all we can to support firms and workers across Wales and our £1.7bn package of business support has been crucial to that effort," he said.

"Latest figures show our Economic Resilience Fund has now helped protect more than 100,000 jobs that could otherwise have been lost as a result of the pandemic and has provided nearly £300m of financial support to 13,000 businesses at the time they needed it most."