Unemployment is up – but can we trust the ONS’s numbers?

The UK’s unemployment rate rose to 4.2 per cent in the three months leading up to August this year, according to new experimental data from the Office for National Statistics (ONS). This is a 0.2 per cent increase compared with the previous quarter (March to May 2023), but not a big change compared to previous data sets. The new numbers tell a familiar story: that the labour market is cooling slightly yet employers remain desperate for workers.

For the last five decades, the ONS has relied on its Labour Force Survey – which covers ‘tens of thousands of households across the UK’ – for its employment data. But in a blog explaining changes to their metrics this morning, the ONS’s director of economic statistics Darren Morgan explains that it’s been ‘harder to engage with enough people in certain groups’ especially since the pandemic.

The ONS is now using HMRC’s PAYE data to track employment rates, and claimant count data to monitor unemployment rates – both of which it says proved accurate during the pandemic.