FAS: Unemployment to worsen, expects above 6% in '09

Taken from RTE.ie, 9th April 2008

and this little, possibly telling, insight

rte.ie/business/2008/0409/fas.html

Blue Horseshoe

FAS are more than a bit behind the curve with their figures seeing as according to the CSO unemployment is already 5.5%. Unless they are trying to tell us that it will stabilise for the rest of the year!

Yeah, and I predict Liverpool to beat Arsenal last night.

While the unemployment rate for march is estimated to have been 5.5% , this is based on a Live Register estimate which tends to have slightly overestimated the actual unemployment rate (according to the CSO Quarterly National Household Survey). The actual rate is probably closer to 5.3% and this also might be artificially high due to a large number signing over the Easter Holidays. Given that the FAS forecast of 5.5% is an annual average, then if the true unemployment rate for June turns out to be 5,5%, then the average annual rate is probably will probably close to this figure also.

I just wanted to know if you could point out the revisions that occurred following the release of the Sept-Nov. QNHS. That release put the benchmark (i.e. they adjust the Live Register based figures) at 4.6% in October. If you know hoe much the October figure was for October under the Live Register we can get a feel for potential revision/rebasing.

The next monthly benchmarking will be for the January figure. The Live Register implies a rise from 4.6% to 5%. I am not so sure this is likely to be revised down, but would be interested to see the recent experience.

The original LR estimate for October was 4.8%, this was revised down to 4.6% after Q4 2007 QNHS (Sep-Nov). Similary July LR estimate was 4.6% subsequently revised down to 4.4% after Q3 2007 QNHS (Jun-Aug). It may be that the relationship between the LR and unemployment has changed recently and hence the overestimation. One possible explanation would be the significant increase in part-time emp, which could lead to an increase in the LR but not show up in unemployment as measured by the QNHS. If you want to compare accuracy overtime you will need to go back to the archives on the CSO website: cso.ie/releasespublications/ … rchive.htm

Surprising that they would allow an apparent systematic error to creep in.

One potential reason is the deceleration in labour force growth, which might have caught them by surprise. It is possible that they have picked it up and adjusted for it.

We’ll just have to wait and see.