Unemployment Uncertainty

What doe the statistics mean, and should we take them seriously?

People who have stopped looking for work aren't counted in the unemployment statistics. Recently, this meant that UK unemployment increased even though more people are employed - because more people flagged themselves as looking for work.

Economists often say we underestimate unemployment because some workers are discouraged, meaning they want to work but have given up. However, this isn't fair because some people say they're looking for work but have an overinflated idea about what job they deserve. An unqualified young man calling himself unemployed because he's holding out for a £30k starting position and turning down internships should be considered "out of the workforce".

The point is that the estimates are probably wrong, but it's not clear in which direction. So let's not be overly pessimistic.