Yesterday brought a rather important update from the UK Office for National Statistics.
Transitioning to the online-first Transformed Labour Force Survey (TLFS) in 2027 is an important strategic priority for the Office for National Statistics (ONS) as the sustainable solution to declining participation and quality issues affecting traditional social surveys.
The bit that caught my eye was “important strategic priority” which means it is still not ready and that matters if you ask the question posed by Ace.
How long has this been going on?
How long has this been going on?
Let me hand you over to the House of Commons Library.
Falling response rates to the Labour Force Survey mean that labour market data published by the Office for National Statistics (ONS) has become less reliable. In October 2023, the ONS only published some experimental headline statistics for unemployment, employment and inactivity.
It will not be too long until it is three years since then as we wonder again about “important strategic priority”? You see the Office for National Statistics had been singing along with Lyndsey Buckingham for some time before this.
I should run on the double
(I think I’m in) I think I’m in trouble
(Oh, no, I think I’m in) trouble
(Oh, no, I think I’m in) I think I’m in trouble
(Oh, no, I think I’m in) I think I’m in trouble
Or as the House of Commons Library puts it.
the response rate for the LFS fell from 47.9% in June to August 2013 to 14.6% in June to August 2023, which means the number of people in the LFS sample in Great Britain fell from 78,994 to 36,526 over this period. Response rates fell particularly quickly during the Covid-19 pandemic, when lockdowns forced a switch from face-to-face interviews to phone calls.
Actually if you look back to the early 1990s they got nearly 100.000 responses so they decline which was longstanding sped up. The response was to adopt the Ostrich position and hope it would go away. So the traditional bureaucratic response of looking the other way. I know people who contacted them having looked at the Quality Reports and were brushed off. The situation was only admitted to when there was no other choice.
Why does this matter?
The ONS was providing two very different views on the same UK labour market as I pointed out on November 1st 2024.
The Labour Force Survey tells us there are 33.4 million employed and the Workforce Jobs survey tells us this.
The estimated number of WFJ for June 2024 was 37.1 million, as described in our Vacancies and jobs in the UK: September 2024 bulletin, which continues to be at historically high levels.
There is a difference between employment and number of jobs as some will have more than one job. Bur even when one makes allowances for this there is quite a wide divergence.
Regular readers will recall discussions on here about one official survey (WFJ) telling us that employment recovered strongly after the Covid pandemic and the other (LFS) telling us it has struggled. The gap was usually more than a million jobs. So for example the Bank of England was left in rather a pickle. Which one to believe?
This also means that the unemployment numbers are also unreliable and I regularly see people using derivatives like productivity when frankly the numbers they are based on cannot be relied on so they could easily be hopeless and probably are.
RTI or tax numbers
These have come into use as a type of ersatz fix but many are unhappy with this. Tony Dent of Better Statistics is very frustrated that they are used at all and Bill Wells replied to me on social media yesterday with this.
There is an improvement to labour market stats they could introduce now. Stop using RTI/PAYE stats as a leading indicator. It is not a Jobs Measure but a by-product of an admin series. And subject to enormous revisions.
He thinks that it over stated jobs growth around Covid and more recently understated it.
Wages or Average Earnings
The official figures here became a joke post Covid when according to them all that was needed for real pay to surge was for the economy to collapse! I reported them to the regulator.
Official Average Earnings numbers are both misleading and wrong
In a nutshell the official response was move along now nothing to see here….
Inflation
Over the years I have written many articles explaining why UK inflation has been under recorded. Apart from the issue with the cost of living crisis this means that GDP has been over recorded and as we have not had much growth anyway that is significant.
The official ONS line has been that they know best something that has been challenged by the collapse of their labour market survey. But the inflation problem started in 2010 when they changed the measurement of clothing inflation and really opened a can of worms. Anyway they used it as a way of pushing for the CPI series which tends to give a lower number than the RPI series. As the issue was fashion clothing they coould easily have produced numbers with and without it. After all the CPI numbers ignore the much more significant owner-occupied housing sector.
Even worse they pushed the imputed rent driven CPIH derivative and it was hard not to have a wry smile when it turned out that they had made a mess of measuring rents too.
My campaign that official UK Rental Inflation figures have been too low gets an official confession
You may note that all the official errors in the inflation arena lead to lower numbers being produced.
Retail Sales
These have had their problems too.It has always had an erratic nature but these numbers from the 16th of February 2024 rather took the biscuit.
Retail sales volumes (quantity bought) are estimated to have rebounded by 3.4% in January 2024, following a record fall of 3.3% in December 2023 (revised from a fall of 3.2%). This was the largest monthly rise since April 2021 and returned volumes to November 2023 levels.
GDP Growth
This keeps seeing a bias towards the first quarter of the year where sometimes the recorded growth is more than the rest of the year put together. But you don’t need to take my word for it because on the 14th of May we were told this by James Benford.
, as a result of this and other updates, now show headline GDP growth of 0.7% in 2024 Q1 (previously estimated at 0.8%) and 0.6% in 2025 Q1 (previously estimated at 0.7%).
When do you think the next downwards revision will be?
Comment
There will always be errors and revisions in national statistics. The present problem is the number and size of them that has led to a loss of confidence. I have not mentioned today the series in which people probably have the least confidence which is/are the trade figures. I recall raising the services trade figures in 2017 with former Bank of England Governor Charlie Bean pointing out that in a report of around 35 pages the largest sector in the UK economy less than a page and what was on it was repeated. to get that much As far as I can tell nothing has improved and we still produce monthly figures from a quarterly survey.
“Why, sometimes I’ve believed as many as six impossible things before breakfast.” (Lewis Carroll)
At the UK Statistics Authority meeting on the 2nd of July there was a call from the statistician Simon Briscoe for UKSA to be closed down on the grounds of its obvious failure. That did achieve one thing which was many other questions and points were ignored as the meeting then moved to a close. But you would have to have been there to be aware of this as it appears to be missing from the record.
The recording appears to end with Denise Lievesley’s presentation which means that the question and answer session doesn’t appear to be included in the recording. (Arthur Barnett on Statsusernet)
Plus we got a video from the chair of the parliamentary PACAC committee Simon Hoare which was full of buzz words and phrases like “at pace” but I am sure inadvertently failed to mention the the official report I had given evidence too. Something he has repeated by inadvertently not replying to my question on Twitter (X) asking about it. Where is it?
Lastly there is the Office for Statistics Regulation which I have given evidence too on several occasions but has shown no sign it has understood any of it.
Don’t worry as in a year it will be fixed.
July 2027 will be an important decision point when, if we and our users are ready, we will start the process for a November 2027 transition to the TLFS;
Trouble is I have an awful feeling I have heard that before.