Revised official statistics suggest that the UK’s labour force is not as healthy as previously reported, with increases in both the unemployment and economic inactivity rates.
According to the Office for National Statistics’ UK labour market overview for October 2023, there is now uncertainty around the estimates derived from the Labour Force Survey (LFS), which it usually uses to measure the state of employment in the UK.
It has now published “experimental” figures based on data from PAYE real-time information submissions to HMRC and benefit claimant counts, which the ONS said “provide a more holistic view of the state of the labour market while the LFS estimates are uncertain”.
Rising unemployment
Applications per job soared in August
The experimental ONS figures for June-August 2023 show a 0.3 percentage point decrease in the UK employment rate to 75.7% compared with March to May 2023, and a 0.2 percentage point increase in the unemployment rate to 4.2%.
The economic inactivity rate, which has recently been largely driven by increases in long-term sickness, rose to 20.9%, an increase of 0.1 percentage points using the experimental ONS figures.
The estimated number of employees on payrolls in September 2023 was largely unchanged on the month, down 11,000 on the revised August 2023 figure to 30.1 million. However, the ONS said this estimate should be treated as provisional until more data are received.
Ben Harrison, director of the Work Foundation at Lancaster University, said the experimental ONS figures would make it difficult to draw comparisons with previous months’ figures.
“Policy-makers were already facing difficult decisions as we head towards the King’s Speech and Autumn Statement, but need access to the best quality data to make sure any changes in policy support workers and employers still struggling with the cost of living crisis,” he said.
“Even though there is uncertainty regarding elements of labour market data, the overall picture still underlines the importance of government boosting skills training and providing more tailored support for jobseekers with different needs.”
Recruitment and Employment Confederation chief executive Neil Carberry said: “We should be careful about drawing conclusions from this experimental data set, which may be prone to fluctuations as it develops. The Labour Force Survey remains the best official monthly guide to the performance of the jobs market, and it is essential that ONS resolves concerns about it as quickly as possible.”
Last week the ONS revealed that growth in average weekly earnings rose above inflation for the first time in two years in July-August 2023.
Sign up to our weekly round-up of HR news and guidance
Receive the Personnel Today Direct e-newsletter every Wednesday
Latest HR job opportunities on Personnel Today
Browse more human resources jobs
