Unemployment rate points to softening market
Unemployment came in largely unchanged at 4.2% and companies employed 82,000 fewer workers in the last three months, according to delayed and adjusted figures from the Office for National Statistics.
The data was held back by a week due to changes in the labour force survey, and the ONS said it has used extra data sources to estimate the figures based on new metrics.
Indications of a softening of the jobs market has added weight to the case for the Bank of England to leave interest rates unchanged.
“Because of the increased uncertainty around the Labour Force Survey (LFS) estimates, today we are publishing an alternative series of estimates of UK employment, unemployment, and economic inactivity as experimental statistics,” said the ONS.
Darren Morgan, ONS director of economic statistics, said: “Today we have produced a new metric, produced by adjusting our headline survey estimates using robust administrative data sources that we receive from other Government departments. This maintains the accuracy of our key statistics.
“This is part of our transformation of the way we measure the labour market where we are introducing an improved Labour Force Survey, asking more people in different ways about their employment status.”
Official figures last week showed that real earnings are outstripping inflation for the first time in nearly two years.
Jane Gratton, deputy director public policy at the British Chambers of Commerce said: “Underneath these headline figures the skills crisis continues and the overall picture remains challenging. The Chancellor should introduce tax breaks in the Autumn Statement to help firms invest more in training and Occupational Health benefits.”
Marcus Brookes, chief investment officer at Quilter Investors, said: ‘At a time when every data source will be analysed to the nth degree by the Bank of England and investors, it is unfortunate that the ONS had to delay the publication of the employment numbers to today.
“With low response rates to surveys and a new ‘experimental’ data series being used, today’s figures provide a slightly clouded picture of what is happening in the labour market, at a point where we are a very finely balanced point in the rate hiking cycle.
“Looking at the ‘experimental’ data, we can see that unemployment in the UK is remaining stable, for now.
“However, the fast rise in interest rates is beginning to bite and we are seeing companies scale back hiring and in some cases shed jobs, with the employment rate falling and unemployment rising gradually in the last three months.