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What Fake UK Unemployment Statistics Predict for General Election Result 2019

Economics / Unemployment Dec 06, 2019 - 06:54 AM GMT

By: Nadeem_Walayat

Economics

It's the economy stupid! The party in government tends to lose elections to the opposition on the basis of where the economy stands at the time of the general election. So whilst Boris Johnson's "Get Brexit Done" headline grabbing mantra sounds like it could deliver the Tories enough votes to win. However, if the economy is on the slide then all slogans and promises will be ignored, much as was the case for Theresa May's 2017 all about getting Brexit done election campaign.

So the focus of this analysis is where the economy stands and it's direction of travel relative to where economy stood in the run up to the June 2017 General Election as one of the 9 key election forecasting lessons learned from the outcome of the 2017 general election.


Forecasting UK General Election 2019 Result With Lessons Learned from 2017

UK General Election Forecast Analysis

The aim of this series of analysis is to further fine tune my core election forecast based on the single most accurate predictor of UK general elections, house prices momentum that concluded in a forecast of xxx seats first made available to Patrons who support my work on the 24th of November 2019.

  1. UK House Prices Momentum General Election Core Forecast
  2. Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast
  3. What the UK Economy Predicts for General Election 2019
  4. Marginal Seats Election Predictor
  5. Social Mood and Momentum Election Impact
  6. Opinion Polls and Betting Markets, UK General Election Forecast Conclusion.

My last analysis on the Manifestos pushed the seats forecast in favour of the Labour party, putting the Tory seats tally stands at xxx ahead of my final forecast that I aim to complete several days before polling day (12th December).

What the economy Predicts for the UK General Election 3 of 5

UK Fake Unemployment Statistics

Britain's headline unemployment figure is now at an historic low of just 1.3 million as the below graph illustrates, far below the trough before the financial crisis hit Britain. So surely this should boost the prospects for the Tory government?

However there is a fly in the ointment and that is the official unemployment statistics have been manipulated lower by successive governments all the way to the point that on their own they are pretty much meaningless. For instance there are over 8.6 million people of working age who are ECONOMICALLY INACTIVE, that's another word for unemployed!.

So as I have been iterating fore MORE than a decade(01 Jul 2010 - UK Unemployment Forecast 2010 to 2015), REAL UK Unemployment is far higher than the official statistics state it to be, currently probably more than triple the official figure that puts real UK unemployment in the region of 5 million and not 1.3 million.

To illustrate this point the above graph also shows that the number of people claiming unemployment related benefits (claimant count) which has risen from 730,000 in 2016 to 1.2 million today. Whilst at the same time the number of people officially classed as unemployed has fallen from 1.7 million to 1.3 million today.

So what has changed that is apparently automatically reclassifying an increasing number of the hidden from statistics in receipt of benefits unemployed to be officially being recognised as being unemployed?

Well there is one Tory government policy that stands out which is the roll out of Universal Credit. As most of the hidden unemployed are claiming supposed in work benefits such as working tax credits, child tax credits, housing benefit etc... Where a large percentage of whom are actually NOT working! An industry of fake employed and fake self employments has grown up that number in their millions all to avoid having to undertake the duties of looking for a real job as required for those registered as unemployed i.e. in receipt of Job Seekers allowance. So as many as 4 million additional unemployed are claiming benefits without any requirements to look for work.

The unintended consequences of Universal Credit is to expose the 'fake' workers, and so most of the people transferred over to Universal Credit tend to be reclassified to their actual state of unemployment which is probably why there are so many protests against Universal Credit as it threatens to end the gravy train that many millions have been on for decades.

The relative trend trajectories also suggest that claimant count is set to surpass the unemployed number within the next 6 months, which will illustrate just how fake Britain's economic statistics truly are that more people are claiming out of work benefits than are recorded as being unemployed! Though what is actually likely to happen is that the Government will CHANGE the methodology for calculating the claimant count numbers so as to reduce the number to roughly 800,000 below the Unemployed total as has been the case before the roll out of Universal Credit began.

How do the Fake Unemployment Statistics impact the General Election ?

Obviously the Tory government can continue to use the fake unemployment statistics for propaganda purposes, to bang the drum of having cut UK unemployment towards record lows despite the fact that the real number of unemployed being more than triple the official figure!

So the Tories gain some propaganda value for being able to pump out low unemployment graphs based on official statistics that paint them in a good economic light.

REAL TERMS AVERAGE EARNINGS

The rest of this analysis in my Forecasting the UK General Electon series has first been made available to Patrons who support my work:What the UK Economy Predicts for General Election 2019

So for immediate First Access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your Analyst

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2019 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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