Unemployment rate further down, to 3.4 percent in April

In April, 4.1 million people aged 15 to 74 years did not have paid work for a variety of reasons. In addition to the unemployed, 3.8 million people were not looking and/or immediately available for work recently. These people are not counted towards the labour force. Their number rose by an average of 4 thousand per month over the past three months.

Unemployment rate further down in April

In order to enable comparison of cyclical movements in the labour market between countries, the unemployment indicator of the International Labour Organization (ILO) is often taken as a measure. According to this indicator, the ‘unemployed’ includes all persons who do not have paid work but who have been looking recently and who are immediately available. This covers the population aged 15 to 74 years. There were 316 thousand unemployed in April, equivalent to 3.4 percent of the labour force. Between March and August 2020, the unemployment rate rose from 2.9 to 4.6 percent. After that, it declined almost continuously.

UWV: fewer unemployment benefits for third month in a row

At the end of April, UWV provided 266 thousand current unemployment (WW) benefits, nearly 16 thousand fewer than at the end of March. This means that the number of WW benefits dropped for the third consecutive month. Compared to April 2020, it was 8.8 percent lower; 292 thousand benefits were paid that month. The number of WW benefits rose particularly sharply in the first period of the coronavirus pandemic and measures limiting contact between people, between March and April 2020.

UWV: sharpest drop in WW benefits seen in temporary employment and accommodation and food services

In April 2021, all sectors recorded fewer WW benefits compared to the same month last year. The decrease was largest in the temporary employment sector (-8.6 percent) and in accommodation, food and catering services (-8.0 percent). Both sectors were hit hard by the coronavirus crisis. Now that more relaxations are possible, such as the partial reopening of terraces, employers are looking for (temporary) staff and fewer people are losing their jobs. Seasons affect the number of WW benefits as well. Employment is usually up again after the winter in seasonally sensitive sectors such as construction and agriculture. The temporary employment sector also benefits from this.

Unemployment declined over the past three months

The decline in the number of unemployed over the past three months is the result of underlying flows between the active, unemployed and inactive labour force. This is visualised in the diagram below.

In April, 316 thousand people were unemployed. This number stood at 337 thousand three months previously, in January. This means that unemployment declined by 21 thousand over this period (7 thousand per month on average). The reason is that there were more unemployed who found work (from unemployed to employed) than employed who lost their job and became unemployed (from employed to unemployed). On balance, this resulted in unemployment declining by 24 thousand over the past three months.

In April, there were slightly more people who started seeking work with no direct result (from inactive labour force to unemployed) than unemployed who stopped seeking and/or were not available (from unemployed to inactive labour force). As a result, unemployment rose by 2 thousand over the past three months, on balance.

Developments since 2014

As shown in the above diagram, unemployment can increase from two sides. There can be an inflow from the active labour force and from the inactive labour force. From May 2014 through March 2020, the net inflow into the unemployed labour force was negative in each month. This means that there were more unemployed who found work than employed who became unemployed. This changed in April 2020, when more unemployed were added on balance. As of September, the balance was negative again and more unemployed people flowed into the active labour force than vice versa.

There is also an exchange between the unemployed labour force and the inactive labour force. If the net inflow to the unemployed labour force on that side is positive, it means that there are fewer unemployed who are leaving the labour market than there are people who start seeking work. In April, the net inflow was slightly positive for the first time this year (2 thousand). Before that, the net inflow into unemployment had been negative for five months in a row. The last time this balance was negative for so long in a row was in 2014, when unemployment reached a peak during the previous crisis. Since then, the net inflow into the unemployed labour force from the inactive labour force has generally been positive.

Every month, CBS publishes figures on the labour force in accordance with international guidelines. The corresponding indicators, i.e. the employed and unemployed labour force, are used around the world to describe cyclical developments on the labour market. Monthly figures are essential in this respect. In addition, UWV issues its own monthly figures on unemployment benefits. Figures released by UWV do not correspond one-to-one with the labour force indicators.