ubet63 Britain’s Flawed Jobs Reports Leave Economists ‘Second-Guessing’

An essential ingredient in economic policymaking, from interest rates to government spending, is reliable data. But government officials, economists and other number crunchers in Britain are expressing deepening concern over a long-running issue with a data set used to understand a crucial area: the country’s jobs market.

For more than a year, the Office for National Statistics has been struggling to resolve fundamental issues with its Labor Force Survey, a monthly household study that is used to determine how many people in Britain are employed, as well as those who are not working and why.

The survey has suffered from a deep slump in response rates, a problem that got so bad that economists no longer fully trust the flagship jobs report. Instead, they piece together an economic picture using alternative data sources such as tax records and business surveys.

“It changes the game in terms of what I’m doing,” said Andrew Wishart, an economist at Berenberg Bank. “You have to spend a lot of time second-guessing the official statistics.”

Most economists believe that the nation’s official statistics agency has been underestimating Britain’s employment rate and overstating the problem of so-called economic inactivity, which measures how many people aren’t participating in the labor market.

ImageLawmakers in Britain have pledged hundreds of millions of pounds to programs to reduce economic inactivity.Credit...Tolga Akmen/EPA, via Shutterstock

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