At first glance, the latest labour market data release from ONS appears to offer good news on the state of the labour market, with falls on some key measures of unemployment.However, as XpertHR's economic commentary for August 2012 notes, the overall picture for the UK labour market is more complex.
It appears likely that the news of falls in the headline rates of unemployment - while extremely welcome - reflect the impact of short-term hiring in the run-up to the London 2012 Olympics on the UK labour market.
Olympic boost to employment data 'likely to be unwound'
These positive effects are consequently likely to be short-lived.
Peter Dixon of Commerzbank comments:
(It is) entirely possible that there will be a temporary boost due to Olympics, possible that there will be more to come, but if this is Olympic related temporary hiring, it is likely to be unwound again later in the year. [...] Olympics is distorting data to an extent and adding volatility. I think the underlying data is still fairly weak.
See also
- XpertHR economic commentary August 2012: Going nowhere
XpertHR's latest economic commentary article includes a detailed look at the complex picture of the UK labour market revealed by the latest ONS data release. - The image used on this page - entitled Unemployed Girl - was sourced from Wikimedia Commons.
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