What's happening to UK unemployment?
Is the situation perhaps worse than it seems?
A short thread...🧵1/
Is the situation perhaps worse than it seems?
A short thread...🧵1/
Official estimates of employment (from the @ONS labour market survey) and the payrolls data (from @HMRCgovuk) both showed a sharp decline in 2020...2/ 
But the fall in the payrolls data was notably larger.
It suggested around 241,000 more job losses by October 2020 than the official survey data does.
That's a pretty significant divergence, equivalent to around 0.7% of the overall UK labour force...3/
It suggested around 241,000 more job losses by October 2020 than the official survey data does.
That's a pretty significant divergence, equivalent to around 0.7% of the overall UK labour force...3/
So why the gap?
@ONS analysts think it could be due to many people telling the labour force survey that they're employed, despite fact they're not working & they've not been furloughed by an employer...4/
@ONS analysts think it could be due to many people telling the labour force survey that they're employed, despite fact they're not working & they've not been furloughed by an employer...4/
And why would they do that?
ONS suspects many are young people, previously casually employed in hospitality, who think they will ultimately get shifts back when the pandemic ends...5/
blog.ons.gov.uk/2021/01/29/pai…
picture-what-our-statistics-tell-us-about-the-labour-market/
ONS suspects many are young people, previously casually employed in hospitality, who think they will ultimately get shifts back when the pandemic ends...5/
blog.ons.gov.uk/2021/01/29/pai…
picture-what-our-statistics-tell-us-about-the-labour-market/
The ONS notes that the 280,000 people who SAY they are employed (despite not being paid or furloughed) more than offsets the gap in the two employment measures...6/
It's very welcome the ONS is digging into the data and offering us this explanation for discrepancies.
But I'm not sure how much comfort we can take from the explanation if it's right...7/
But I'm not sure how much comfort we can take from the explanation if it's right...7/
Are all those 280,000 people really going to get their work back imminently?
Or are they actually unemployed?
And should they be considered as such, despite the way they are self-reporting their status?...8/
Or are they actually unemployed?
And should they be considered as such, despite the way they are self-reporting their status?...8/
I could be wrong, but I think it's more realistic at this stage to lean towards the former.
And if you do shift those 280,000 people from the employed to the unemployed column, the official jobless rate is closer to 6% than 5%...9/
And if you do shift those 280,000 people from the employed to the unemployed column, the official jobless rate is closer to 6% than 5%...9/
Which is still - it should be stressed - better than feared.
And certainly better than in the absence of furlough.
But perhaps a reason to not take too much reassurance from the headline ONS employment/jobless figures.
ENDS
And certainly better than in the absence of furlough.
But perhaps a reason to not take too much reassurance from the headline ONS employment/jobless figures.
ENDS
ADDENDUM
ONS actually produces a weekly time series estimating number of people claiming to be employed but receiving neither pay nor furlough money (Tab 11a) - was actually 380k in most recent estimate (around 1% of workforce)...
ons.gov.uk/employmentandl…
ONS actually produces a weekly time series estimating number of people claiming to be employed but receiving neither pay nor furlough money (Tab 11a) - was actually 380k in most recent estimate (around 1% of workforce)...
ons.gov.uk/employmentandl…
Though as you can see this it bounces around A LOT from week to week - another reason to be cautious about these estimates
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