Q1 employment figures UK

Unemployment has fallen by 88,000 to reach 2.43m in the quarter to April 2011 – the largest quarterly drop in 11 years according to today's figures.  That's good right?

No. It does not record those people who have given up, and those people who have taken a part time job because they could not find a full time job.  It records only those who are looking, and have been for a fixed number of weeks.  The Americans call the 'given up' group the 'discouraged'. It means that they cannot find work - of any kind that they will take.  The 'unemployment' number has fallen 88,000 and the number of people who have taken part-time employment but who want full-time employment rose by 46,000 - explaining half of the fall.

Like most government key statistics like inflation and GDP it is misleading and manipulated.  It is based on a survey, it is not a count, but an estimate based on that survey. I suspect that the margin of error on such a sample - grossed up as it is to estimate the entire population - is significant.  It is also subject to 'seasonal adjustment'.  All of which makes it essentially guesswork. 

A better measure is the number of employed, split into full-time and part-time.  What we need to know is - how many people in the population are engaged in activity in which they do things in return for money - and how much time do they spend doing it?  This measure would show that the number of employed is falling, and has been falling for some years.  It is also a number that can be measured very accurately - everyone engaged in activity in exchange for currency is subject to tax.  Count the taxpayers who pay income tax or receive private company dividends and you have your employed number.  What's the difficulty?