UK Unemployment Rate to be Published Using New Data Sources, Says ONS
Britain’s Office for National Statistics (ONS) has announced that it will release an experimental adjusted estimate of the country’s unemployment rate on Tuesday. This comes as a departure from its usual publication of the labour market survey, which has recently been plagued by a declining response rate.
In a statement on Monday, the ONS stated that they would be using additional data sources to produce adjusted levels and rates for employment, unemployment, and inactivity for the latest two 3-month periods. However, they clarified that the unadjusted June to August LFS (Labour Force Survey) data would not be published.
This decision follows the ONS’s delay in releasing figures from its LFS survey last week. The survey, which has been experiencing low response rates, is a key source of information for monitoring the job market. The Bank of England, in particular, relies on this data when considering whether to raise interest rates.
In recent months, Britain’s unemployment rate has seen a slight increase, and the most recent partial data release indicated a marginal slowdown in the growth of regular pay for workers. These trends have heightened the importance of accurate and timely job market data.
The ONS has acknowledged the issues with the LFS survey and has previously stated that it would introduce new collection methods in 2024 to improve response rates. However, the reweighting of existing data, which was initially scheduled for October’s release, has been delayed until 2024.
An ONS spokesperson commented that they will continue to publish their best estimates of the labour market as they work towards the transformed survey, but they will continuously review their methods. This suggests that the change in data sources may not be permanent.
The experimental data that will be published includes the unemployment rate, employment numbers, and activity rates for the three months leading up to August and July. Meanwhile, separate data on unemployment benefit claims in September will be released as usual.
The ONS refers to the experimental data as statistics that are still under development and therefore have less certainty. It remains to be seen how these new estimates utilizing additional data sources will compare to the traditional labour market survey.
Overall, this change in data publication by the ONS reflects the challenges faced in collecting accurate job market data due to declining response rates. The experimental estimates aim to provide a more comprehensive picture of the unemployment rate, employment numbers, and activity rates in the UK. The Bank of England and policymakers will be closely monitoring these figures as they make decisions regarding interest rates and economic policy moving forward.
More detail via The Straits Times here… ( Image via The Straits Times )