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Labour market data due at 7:00GMT with focus on wages

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  • Labour market data due at 7:00GMT will still see the majority of the focus on wage data. As we had noted in our Inflation and Labour Market Insight last month, the AWE data in December are expected to come in around 1ppt below the Bank’s November MPR forecast. This was acknowledged by Governor Bailey in his press conference, although a concrete forecast for the December print was not published within the February MPR.
  • If we see a similar fall of around 2ppt in December cohort for private sector regular pay (following a 2.1ppt fall in November and a 1.8ppt fall in October) we would see the 3-month average fall to around 6.1%Y/Y in the 3-months to December (assuming we don't get any meaningful revisions). There were only 6 analyst previews that we read that included an explicit forecast of this metric – with half looking for 6.1%Y/Y in the 3-months to December and half looking for 6.0%Y/Y.
  • In terms of total AWE ex-bonus, the median expects a fall to 6.0%Y/Y in the 3-months to December (from 6.6%Y/Y in the 3-months to November). Estimates for total AWE including bonuses range between 5.5%Y/Y to 5.7%Y/Y in the 3-months to December – the median from the previews we have read comes in at 5.6%Y/Y.
  • We still don’t pay much attention to the unemployment figure which is still not trusted enough by the ONS to have regained its “national statistic” status. Note that the Transformed Labour Market Survey (TLFS) is now expected to be published regularly until September. We discussed more on the implications of the revised unemployment numbers in last week’s Gilt Week Ahead here.
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  • Labour market data due at 7:00GMT will still see the majority of the focus on wage data. As we had noted in our Inflation and Labour Market Insight last month, the AWE data in December are expected to come in around 1ppt below the Bank’s November MPR forecast. This was acknowledged by Governor Bailey in his press conference, although a concrete forecast for the December print was not published within the February MPR.
  • If we see a similar fall of around 2ppt in December cohort for private sector regular pay (following a 2.1ppt fall in November and a 1.8ppt fall in October) we would see the 3-month average fall to around 6.1%Y/Y in the 3-months to December (assuming we don't get any meaningful revisions). There were only 6 analyst previews that we read that included an explicit forecast of this metric – with half looking for 6.1%Y/Y in the 3-months to December and half looking for 6.0%Y/Y.
  • In terms of total AWE ex-bonus, the median expects a fall to 6.0%Y/Y in the 3-months to December (from 6.6%Y/Y in the 3-months to November). Estimates for total AWE including bonuses range between 5.5%Y/Y to 5.7%Y/Y in the 3-months to December – the median from the previews we have read comes in at 5.6%Y/Y.
  • We still don’t pay much attention to the unemployment figure which is still not trusted enough by the ONS to have regained its “national statistic” status. Note that the Transformed Labour Market Survey (TLFS) is now expected to be published regularly until September. We discussed more on the implications of the revised unemployment numbers in last week’s Gilt Week Ahead here.