The latest labour market statistics had something for everybody. Green shoots watchers will have taken encouragement from the small rise in the claimant count, up just 23,800 in June to 1.56m, its smallest monthly rise since May 2008.
A much gloomier view, however, was provided by the Labour Force Survey, which showed a record 281,000 rise in unemployment to 2.38 million, or 7.6% of the workforce, in the three months to May. This was consistent with LFS data showing a 269,000 drop in employment over the period. Average earnings growth, meanwhile, slipped, to 2.3% including bonuses and 2.6% excluding them.
So what’s happening? It is possible that the nature of this recession means a large number of unemployed people are not claiming benefit, though the discrepancy between the two sets of data looks too large for that. It is possible too that the LFS, which is less timely, also provides more of a lagging indicator of job market activity. So it is still mainly reflecting the bad winter, rather than more recent signs of economic improvement.
In the end, despite the government’s preference for the LFS measure, it is a survey (of 60,000 households), and thus subject to the usual uncertainties of surveys. The significance of the latest numbers, however, is that they suggest employment has finally taken a big hit. More details here.
Originally published at David Smith’s EconomicsUK and reproduced here with the author’s permission.