Don't believe the headlines: unemployment actually rose in December
You’ve heard of optical illusions; well prepare yourself for a statistical illusion.
Earlier this morning, the Office for National Statistics reported that unemployment had fallen. That is the headline most news organisations have run with. Ministers and economists are declaring it is good news for the economy.
The reality, however, is quite the opposite. In the most recent month for which we have overall UK labour market figures, which is December, unemployment actually rose. In November, 2.42m Britons were out of work. In December, that rose to 2.504m.
It’s a similar story for overall employment – the number of people in work – which fell by 21,000 to 29.76m between November and December.
So why, you might reasonably ask, does the official statistical release say unemployment was down and employment up? Because they prefer to compare quarterly periods rather than monthly periods.
The jobless total is indeed down if you compare October to December with the July to September period. And there’s a decent argument for comparing these figures in the medium term, since they’re pretty volatile from month to month.
As a result, those month-on-month figures I mentioned above are buried away in the ONS website far from where normal people would ever find them.
Now, there’s no one correct way of looking at the unemployment figures – but however you look at it there’s no doubt that the labour market is improving on a long-term basis. The number of people out of work has fallen rapidly in recent months. The proportion of economically-inactive people (those outside the labour market) is down to the lowest level since 1991. And, if you were looking for a sign that the improvement is continuing into this year, the claimant count of those out of work and claiming benefits (an alternative but less comprehensive measure) was down between December and January.
So it’s more than possible that that rise in unemployment in December will turn out to be a blip. But let’s call it what it was: a rise. The number of people out of work was higher in December than it was in November. Not lower.