Unemployment Figures in the UK

A few months ago, the BBC and other news outlets in the UK took an editorial decision to report the headline unemployment figure by itself and no longer report the claimant count in tandem.  That decision was I believe flawed, and ultimately represents a move away from reporting statistics and into the realm of propaganda.  I'll explain why I believe this below and let you decide for yourself who is being truthful.

Firstly it's important to know what these two statistics are and where they come from.  The first is the headline Unemployment Rate which is calculated by the Office for National Statistics using a mathematical model of the labour force survey.  The second is the Claimant Count which is a figure produced by the Department for Work and Pensions which states the number of people claiming benefits seeking work.  The former is an extrapolation from a survey of 40,000 households and has a confidence of +/- 79,000.  The latter is a statistic produced from the number of claims issued for benefits seeking work.  The former is an estimate, and the latter is a statement.

The difference here is crucial.  If you were told that your bank balance "rose" by £30 last month, with small print saying that figure may be as much as £79 wrong in either direction, the reality is that your bank account could have risen by £109 or fallen by £49.  If you had the choice between seeing your actual account statement each month and seeing the balance, or being told an estimate of how much your account went up or down, which would you choose to see?

This article from the BBC claimed that UK unemployment "fell" between May and July - that's based on the Office for National Statistics figure.  However if you look at the Claimant Count figure for the same period, unemployment rose by 15,100 people.  You might also notice that 7 out of the last 8 months reported a rise in claimants and the one month fall was a drop of 500 people - totalling 67,100 for the 8 month period.  Using August as a particular example the BBC reported a "55,000 fall in unemployment" - based on the Office for National Statistics figure, and even mentions the claimant count in passing but doesn't report the claimant count figure, which if you look at the link above for August was a rise of 9,900 people.  The difference between the headline estimate figure of 55,000 fall and the real figure of a 9,900 rise, is a 64,900 which is within the 79,000 confidence of the mathematical model.

So, there you have it.  On the one hand, a figure that is an estimate which can be wrong by 79,000 either way, which is now the primary method of reporting unemployment, and on the other hand you have the actual figure for unemployment claims produced by the government itself from the department itself responsible for unemployment, from the actual number of people claiming those benefits - which is no longer being reported by the media, because it conflicts with the estimate.

So who's lying to you?

I have written about this in a previous post when I mentioned the fine line these media outlets walk, knowing what they can report and how to report it in a way that they can be misleading without being held accountable for it.

I'll leave you with one thought to dwell on.  If you were told each month that your bank account rose by £30 when in reality it fell by £10, what would you do after a year when you look in your account and find out you have £120 less than when you started when you were expecting it to be £360 more? - A difference of £480.