Jobless figures for geeks

The Office for National Statistics (ONS) issued its monthly labour market statistics (LMS) last week. This website reported that the regional labour market had strengthened again.

In contrast, the unemployment rate was reported elsewhere to have risen sharply, ending a run of falls.

So, who was right? The topic being statistics, the answer of course is both.

Figures

The ONS publishes the LMS every month on a three-month rolling basis. This means it is possible to compare the statistics on either a monthly or a three-monthly basis. However, the ONS regards the monthly figures as volatile and much less reliable than over three months. They do not have the status of National Statistics.

Thus, for example, the North East unemployment rate for March-May 2023, published on 11 July, was 3.5% – a significant fall of 0.7% compared with the preceding period of December 2022 – February 2023, and in fact a record low since this data set was started in 1992. This was the figure used by this website in July.

The figure given by the ONS on 15 August was 4.2%, which was indeed, as reported elsewhere, a sharp rise compared with a month earlier and the end of a run of falls. But the ONS and this website focused their comparisons on the previous three-month period of January-March, which showed no change.

According to the ONS, commenting on its own monthly figures:

the estimates do not have National Statistics status and are volatile;
unlike the three-month average estimates, the single-month estimates are not necessarily representative of the UK as a whole and they are based on only around one third of the sample size;
the three-month average estimates have National Statistics status and provide a much more reliable indication of short-term movements in the labour market.

Information on how the ONS measures its LMS data is available here.

Nomis

One simple way to see the long-terms jobs trend in the region – and anywhere else in the UK – is through Nomis, the official labour market statistics prepared for the ONS by Durham University

Its website includes graphs showing how the figures have gone up and down since 1992. These figures are given in three-month tranches according to calendar quarters: Jan-March, April-June, July-Sept, and Oct-Dec.

Another reason this website had for reporting last week that the regional labour market had strengthened was that the employment rate (people in jobs) has risen to a record high and economic inactivity (those neither in jobs nor looking for a job) has fallen to a record low.

An increase in the unemployment rate is arguably a good thing in the short term if, and to the extent that, it reflects numbers coming out of the inactive category and starting to look for work.

Over the first two calendar quarters of this year the number of people economically inactive in the North East fell by 17,000 to 357,000 while those in employment rose by 22,000 to 1,262,000. The number unemployed rose by 1,000 to 56,000.

It is worth bearing in mind the employment and inactivity rates are proportions of the regional population aged 16-64 while the unemployment rate measures those aged 16 and over.

Strategic economic plan

Not for nothing does the North East’s ten-year Strategic Economic Plan (SEP), launched in 2014 – excludes Tees Valley – target the employment and economic inactivity rates but not the more high-profile unemployment rate.

The LMS measures a host of other important factors about the labour market as well, not least the quality, pay and security of jobs. It is significant that the SEP is titled “More and Better Jobs.”

But that’s another story.