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--February UK Labour Market Data Due For Release Tues
LONDON (MNI) - The UK marks the start of a new permanent data release
schedule change from Tuesday, with the ONS now publishing its labour market
health check a day before its inflation figures from this month. Last month saw
the unemployment rate fall back to 4.3%, on a bigger-then-expected employment
gain, while real wages broke out of negative territory for the first time in
MNI median expectations, taken from a poll of analysts, looks for an
unchanged jobless rate of 4.3% and a pick-up in total nominal earnings growth to
3.0% 3m y/y.
Feb Feb Feb Feb
Employment Unemployment Avg Weekly Avg Weekly Earnings
Change Rate Earnings Ex-Bonuses
3m/3m '000s 3m % 3m % Y/Y 3m % Y/Y
Median +30 +4.3 +3.0 +2.8
Prior +168 +4.3 +2.8 +2.6
Ahead of the release, we outline five themes for particular attention.
Real Wage Growth Poised to Turn Positive.
February's data will be all about wages and specifically the probable
return to positive territory for inflation-adjusted earnings growth. While
unlikely to be accompanied by an immediate pickup in spending, it would be
symbolic to both households, soothing pessimism, and markets, historically a key
metric, after a growth hiatus lasting just shy of a year. The steady decline in
CPI since November as well as underlying wage pressures, steered by
above-average pay hikes and a persistent shortage of skilled workers, have
jointly driven the gentle recovery of real wages.
Nominal Wage Growth Proceeds Higher...
Since the turn of the millennium, nominal weekly earnings have 'grown' on
average by -0.12% between January and February. Such a turnout would still be
enough to nudge wage growth 0.1pp higher to 2.9% 3m y/y this February, as a weak
November drops out of the calculation. Applying the average m/m growth in
earnings over the past 12 months, however, would take earnings to the key 3.0%
threshold, so this remains firmly on the cards. A return to 3% would be the
first time since September 2015 and the first time nominal earnings growth has
exceeded CPI (on a 3m y/y basis) since March 2017.
Strong (Surface Level) Private Earnings Growth.
Private sector wage growth has trended northward for almost a year,
culminating in an impressive 3.0% 3m y/y outturn in January, the highest level
since November 2016. Look at the 3m/3m annualised measure, closely watched by
the Bank of England, however, and it seems some of that growth momentum may have
trickled away. Between May 2017 and December 2017 earnings growth by this
measure sat above 3.0% for all but one month. This January, however, growth fell
rather abruptly from 3.4% to 2.9% -- we await to see if this was just a
Weak Employment Gain Pencilled in.
After a mammoth gain in January the number of those who found employment in
the three months to February is expected to come in a lot weaker (+30,000,
according to an MNI poll of analysts). The data series can be subject to big
swings every now and then so a low count in February should not be perceived as
an easing labour market, especially given business surveys continue to report
solid hiring intentions and vacancies remain at near-record high levels.
Hours Worked on the Up Again.
The recent rebound in UK productivity was flattered by a decline in hours
worked, highlighted by recent MNI analysis. This decline seems to be over, with
total hours seemingly back on the rise -- thus likely to drag productivity back
to its unimpressive levels. In the three months to January hours worked rose
0.63% having declined for the previous four months.
--MNI London Bureau; tel: +44 203-586-2225; email: email@example.com
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