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UK unemployment drops and pay growth slows but ONS says treat data with 'caution'

Published 15/10/2024, 07:53
© Reuters.  UK unemployment drops and pay growth slows but ONS says treat data with 'caution'

Proactive Investors - The UK unemployment rate fell to 4.0% in August and pay growth eased, but the Office for National Statistics warned that its data should be used with caution.

Unemployment unexpectedly fell from 4.1% the month before, while average earnings including bonuses eased to 3.8% in the three months to August from 4.0% before, and to 4.9% from 5.1% if bonuses are excluded.

But the UK official statistical body said "we advise caution when using the data".

It noted that the labour force survey (LFS) estimates have been affected by increased volatility due to it being able to drum up fewer responses in recent years, meaning that "estimates of change should be treated with additional caution".

The ONS acknowledged that "external sources are suggesting that recent increases in LFS measures of employment are likely to be overstating underlying employment growth".

Therefore it expects underlying changes in the other labour market measures will also be affected.

As such, "the more modest growth we see in alternative employment sources may indicate that unemployment and/or economic inactivity have fallen by less than the LFS has recently suggested".

The LFS, it recommends, should be used alongside workforce jobs survey, claimant count data and the pay-as-you-earn information estimates it also provides.

Read more on Proactive Investors UK

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