* Pace of decline in employees on payrolls slows
* Unemployment rate holds steady at 3.9%
* Half a million out-of-work people said they were in work
* Vacancies hit lowest level on record
* Total pay falls by most since 2009
* Data is "calm before storm" - KPMG
(Adds details, comments)
By William Schomberg and David Milliken
LONDON, July 16 (Reuters) - Fewer British workers lost their
jobs in June and there were other signs that the hit to the
labour market had eased off since the onset of the coronavirus
crisis, but economists said unemployment remained on course to
jump.
The number of employees on company payrolls slumped by
649,000 between March and June, despite the government's huge
job retention plan that has protected more than 9 million jobs.
However, June's drop of just over 74,000 was much smaller
than April's 450,000 tumble and was smaller than the fall in May
too, the Office for National Statistics said.
The unemployment rate unexpectedly held at 3.9% in the three
months to May. It would have risen were it not for half a
million people who were away from work and receiving no pay -
but who said they believed they still had a job, and thus count
as employed according to international guidelines.
A rise in people who were not looking for work also pushed
down on the jobless rate.
Most economists polled by Reuters had expected the rate to
rise to 4.2%.
Yael Selfin, chief economist at KPMG UK, said the data
represented "the calm before the storm... but as the Job
Retention Scheme unwinds in coming months, the full impact of
the recession on unemployment is likely to be revealed."
Finance minister Rishi Sunak plans to phase out the scheme
by the end of October. Last week he announced 30 billion pounds
of new measures to stem an expected surge in unemployment.
Since then a string of companies have announced layoff plans
ranging from private security firm G4S to retailers
Boots and John Lewis.
A survey by the British Chambers of Commerce showed 29% of
companies expected to lay off staff in the third quarter.
"It's clear that we're in the middle of a severe economic
downturn," Sunak said after Thursday's data. "As I said last
week, we will never accept unemployment as an unavoidable
outcome."
Britain's budget forecasters say the unemployment rate could
rise as high as 13% this year, exceeding a previous post-war
high of 11.9% set in 1984.
The ONS said the number of people in employment in the three
months to May fell by the most since 2011, down 126,000, driven
mostly by self-employed people.
But the fall was only about half as severe as the median
forecast in a Reuters poll.
The number of people claiming Universal Credit welfare
unexpectedly fell in June by 28,100 to 2.631 million, but
remained more than double its figure in March. The figure
includes people who are in low-paid work.
The number of vacancies fell in the three months to June to
the lowest level since records began in 2001 at 333,000.
But a monthly breakdown showed a slight increase in
vacancies in June alone.
Similarly, hours worked slumped to a record low average in
the March-May period, reflecting the job retention scheme. But
weekly data showed signs of a slight pick-up recently.
The data also showed a hit to pay reflecting how most people
on job retention scheme receive 80% of their pay.
Average total pay, including bonuses, fell by an annual
-0.3%, the first negative figure since 2014 and its biggest fall
since 2009.
($1 = 0.7971 pounds)
(Reporting by William Schomberg, editing by David Milliken and
Hugh Lawson)
