Labour market data due at 7:00BST

• We continue to think that the private sector regular wage growth is the single most important part of the UK labour market release. In the 3-months to April, this metric only marginally decreased to 5.83% 3m Y/Y from 5.88% 3m Y/Y in the 3-months to March (with little notable revisions). This month, the median from the previews that we have read looks for a 5.6%Y/Y print in the 3-months to May.
• To us, this looks a little soft based on the methodology. Recall that these numbers are based on rotating cohorts that are surveyed every 3-months. And if we take as a starting point the 2.21% increase seen in the cohort between January and April (which was seen last month) and apply that to the February cohort to reach a May single month estimate, we would end up with a 5.73%Y/Y print in the 3-months to May. So to get a 5.6%Y/Y print in the 3-months to May, you either need slower wage growth for this monthly cohort, or you need downward revisions to previous periods.
• Along with other factors (outlined in our full preview), to us this also signals upside risks to the private sector regular wage numbers. We would even go so far as to say that an unchanged 5.8%Y/Y print in the 3-months to May (rounded to 1dp) looks a little more likely to us than the 5.6% print that consensus expects.
• The unemployment rate is expected to remain at 4.4% by vast the majority of analysts. Note that the V/U (vacancy-unemployment ratio) is now back to pre-Covid levels.

UK_Data_Preview_2024_07_Release.pdf