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UK Unemployment Rate Decreases, but Continues to Disproportionately Affect Gen Z and Millennials

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“UK’s unemployment statistics witness a transformative shift, but Gen Z and Millennials remain resilient, rewriting the narrative of their generation’s economic future.”

It’s getting harder and harder to know how the labor market is going to perform each month. Britain’s Office for National Statistics (ONS) released new experimental statistics to measure employment, unemployment, and economic inactivity in the U.K., citing “increased uncertainty” around the previous Labor Force Survey and its usual methodology. The shift came from a significant drop in response rates for its usual survey, which made the classic measure no longer reliable.

But rather than higher-than-expected demand for labor driving the confusion, the U.K.’s official stats body is instead laying the blame at the feet of Millennials’ and Gen Zers’ busy lifestyles. According to the ONS’s director of economic statistics production and analysis, Darren Morgan, the lack of reliability of the previous method—which was based on telephone interviews—was generational. Increasingly, Morgan says, it’s just harder to get in touch with people in their 30s and under.

“To remedy this, instead of the ONS’s typical method of interviewing people over the phone to find out people’s job status, the statistics bureau is now using workers’ income tax data and “claimant count” figures — in other words, people in the U.K. claiming unemployment-related social security.

The survey change and ensuing results weren’t good news for the Bank of England, the U.K.’s monetary policymaker. Alongside inflation, labor market data is one of the most crucial measures observed by the Bank when it sets interest rates. The latest data using the new measurement showed the labor market had experienced its third consistent month of jobs decline, the longest uninterrupted contraction since 2021. The figures, though, were slightly stronger than the previous measure.

That might ordinarily indicate an increased likelihood of interest rates staying fixed or rising as the economy cools down slower than previously thought. However, the ONS has long had issues with the accuracy of experimental data so, as the Institute for Employment Studies’ Tony Wilson told the FT, “it is not a good sign that they are now considered more reliable than the official survey.”

It means the Bank of England’s nine-person strong Monetary Policy Committee could be inclined to entirely exclude jobs data when it makes its latest call on interest rates next week.

While it might have created a mini-crisis for the U.K., the latest quirk in data collection isn’t just confined to the country, Morgan tells Bloomberg. Instead, it appears to be a global phenomenon as the nature of work and life become fundamentally altered.

“It’s a really common challenge actually with our statistical colleagues in other countries where we are finding a challenge to maintain response rates and household surveys,” Morgan said.

“People’s lives change. People are busy and around the world. They are not filling in surveys like they once did.”

After quiet quitting, snail girl jobs, and Bare Minimum Mondays, this is just another trend starting with Millennials and Gen Zers that often baffle employers and, in this case, statisticians.

Indeed, classic employment and unemployment data may undersell the job status of Gen Zers and Millennials, who are most often associated with the side hustle. Second jobs are becoming run of the mill as young workers fear getting burned by their employer.

But they’re also the most likely to be struggling. There is a growing perception among younger generations that they have it harder than their parents did. They blame inflation, massive student debt, and an overpriced housing market for shifting the American Dream.

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