It is becoming increasingly difficult to understand how the labor market is performing each month.
The Office for National Statistics (ONS) releases new data Experimental statistics Britain’s employment, unemployment and economic inactivity were measured on Tuesday, citing “increased uncertainty” about the previous labor force survey and its usual methodology.
The shift comes as response rates to its usual surveys have plummeted, making traditional measures no longer reliable.
But the UK’s official statistics agency did not attribute the higher-than-expected labor demand to the busy lifestyles of Millennials and Generation Z.
Darren Morgan, head of production and analysis of economic statistics at the ONS, said previous methods – based on telephone interviews – lacked reliability and were intergenerational. Morgan said it’s increasingly difficult to connect with people in their 30s and younger.
“If you think about the people who have the least time, they tend to be young people,” Morgan told Bloomberg.
“People are so connected and they have so many choices about how they spend their time. In fact, I think we live in a very different world now than we did 20 years ago.”
To get around this, instead of the ONS’s typical approach of interviewing people over the phone to find out how people are doing at work, the Office is instead using workers’ income tax data and “claimant numbers” data – in other words, the British claim Social security related to unemployment.
Number of claimants
The changes to the survey and the ensuing results are not good news for the Bank of England, the UK’s monetary policy maker. Along with inflation, labor market data is one of the most important indicators central banks observe when setting interest rates.
The latest data using a new measure showed the labor market experienced its third consecutive month of employment declines, the longest consecutive contraction since 2021. However, these figures are slightly stronger than previous measures.
This may generally indicate an increased likelihood that interest rates will remain fixed or rise as the economy cools more slowly than previously thought.
However, the ONS has long had questions about the accuracy of the experimental data, as Tony Wilson of the Institute for Employment Studies says this Financial Times”, “They are now considered more reliable than official investigations, which is not a good sign. “
That means the Bank of England’s nine-member Monetary Policy Committee may be inclined to exclude employment data entirely when it releases its latest interest rate decision next week.
global phenomenon
Morgan said that while it may have created a mini-crisis for the UK, the latest quirks in data collection were not limited to the country Bloomberg. Instead, it appears to be a global phenomenon as the nature of work and life fundamentally changes.
“In fact, this is a very common challenge for our statistical colleagues in other countries where we see challenges in maintaining response rates and household surveys,” Morgan said.
“People’s lives have changed. People are busy all over the world. They don’t fill out surveys like they used to.”
Following quiet resignations, snail-girl jobs and the Monday minimum wage, this is just another trend started by Millennials and Gen Z that often confuses employers and statisticians alike.
In fact, traditional employment and unemployment data may underestimate the work status of Gen Z and Millennials, who often work on the side. Second jobs are becoming commonplace as young workers fear being fired by their employers.
But they are also the ones most likely to get into trouble. Younger generations increasingly believe they have it harder than their parents did. They blame the transformation of the American Dream on inflation, massive student debt and an overpriced housing market.
Svlook
