Unemployment goes down ... but also goes up

Submitted by Paul Convery on Thu, 18/02/2010 - 9:06am

Yesterday's announcement of the monthly unemployment figures caused great confusion. The Labour Force Survey count (to December) showed a small decline (down by 3,000) But the JSA figures (for the month to mid January) showed quite a marked rise - up by 23,500. Why the difference?

There's no doubt that the economic recovery is extremely fragile and no-one expects the labour market to immediately bounce back at the first signs of GDP growth returnign to a positive number (albeit a very small positive number). But January's JSA figure may also have a seasonal quirk about it. As Inclusion's Paul Bivand explains in his monthly labour market review, the rise in the January JSA total was caused by the "off-flow" being lower than usual. The number of people who lost their jobs and signed-on over the Xmas to mid-January period was not different to the "normal" trend. But rather fewer people left the register than might normally be expected.

Every month several hundred people sign-on and about the same number sign-off. It only takes a slight wobble in numbers on either side of this equation for the monthly totals (the claimant "stock") to rise (or fall) sharply. It is distinctly possible that January's heavy snow disrupted some of the returners to work. After all, hundreds of thousands of people who do have jobs didn't go into work in the 2nd week of January. So no surprises if jobseekers delayed their job hunting for a few days too. That alone could account for the slight drop in off-flow ... which hiked-up the monthly headline total. The February figures may show if this unexpected "ultra-seasonality" was the cause or not.

See the BBC story: http://news.bbc.co.uk/1/hi/business/8519...
Here's the official ONS release: http://www.statistics.gov.uk/statbase/Pr...
Or review the charts behind Inclusion's analysis at http://www.cesi.org.uk/statistics

Comments

Submitted by Admire on Mon, 05/07/2010 - 7:39am.

Those who have given up searching for a job are being taken off the unemployment numbers therefore skewing the numbers. The shortest explanation for why it looks like we have less unemployed than last month is because when individuals stop trying to find work they're taken off the unemployment list, and most individuals are merely waiting for the job market to pick up. This is such a bad way to report numbers because it gives people false hop and security, especially when 10's of thousands of census workers just ended their temporary jobs and are now needing payday cash advances just to survive.