UK Unemployment Data Underlines Labor Market Softness

(RTTNews) - Latest UK labor market data underscored the softening situation with the number of people in jobs continuing to fall, official data revealed on Tuesday.

The unemployment rate was 4.2 percent in the three months to August, the Office for National Statistics reported based on the new experimental data.

The rate was 4.3 percent in the preceding period, which was derived with the old survey method. Economists had forecast the new jobless rate to remain at 4.3 percent.

Employment decreased 82,000 in June to August compared to a fall of 133,000 in the three months to July.

Data showed that about 119,000 working days were lost because of labor disputes in August. The majority of the strikes were in the health and social work sector.

In September, the claimant count rose marginally to 4.0 percent from 3.9 percent in August. The number of people claiming benefits increased 20,400 from August.

"Today, we have produced a new metric, adjusting our headline estimates using robust administrative data sources that we receive from other government departments," ONS Director of Economic Statistics Darren Morgan said.

"This new adjusted metric gives a good picture of changes in the labour market," the ONS official said.

"However, to avoid confusion we have not published the usual unadjusted LFS dataset alongside it, when we know there are challenges with these unadjusted data," added Morgan. Capital Economics economist Ashley Webb said the labor market appeared not to loosen as much as estimated in August. However, data is unlikely to sway the Bank of England ahead of the next monetary policy meeting.

British Chambers of Commerce Deputy Director Public Policy Jane Gratton said underneath these headline figures, the skills crisis continues and the overall picture remains challenging.

Gratton urged the Chancellor to introduce tax breaks in the Autumn Statement to help firms invest more in training and Occupational Health benefits.

Data released last week showed that wage growth slowed in the three months to August and the number of job vacancies decreased in July to September.

Average earnings excluding bonuses grew 7.8 percent in the three months to August, slower than the 7.9 percent rise seen in the July quarter. Vacancies declined by 43,000 to 988,000 in July to September.