MNI 5 Things: UK Labour Market Data Paints Mixed Picture

By Laurie Laird, Jamie Satchi

     LONDON (MNI) - The following are the key points from the UK labour market

data published Tuesday by the Office for National Statistics.

     - The data May-July data pack painted somewhat of a confusing picture with

job growth slowing, wage growth picking up and vacancies setting a fresh record

high. Overall, the labour market remains robust and the extension of positive

wage growth should continue to help restore households' disposable income.

     -Employment rose by just 3,000 in the three months to July -- the weakest

increase since the three months to October 2017. Linked to this was a sharp rise

in the number of those classified as inactive. The inactivity count picked up by

a marked 108,000 in the 3m to July, taking the inactivity rate (the inverse of

the participation rate) 0.3pp higher to 21.2%.

     -Wages, on both a nominal and regular basis, however, came in stronger in

the May-July period. Total wage growth rose to 2.6% 3m y/y, the highest since

February, while ex-bonus growth rose to a 3-year high of 2.9% 3m y/y. The ONS

cautioned, however, that wage growth in July of 2017 was unusually weak,

providing a low base for comparison.

     -Breaking down regular wage growth by sector, it was the service sector

(+2.8% 3m y/y) and, to a lesser extent, the construction sector (+5.2% 3m y/y)

that provided the bulk of the upward impetus. Ex-bonus wages in the finance and

business services sector, on the other hand, slowed to 2.2% 3m y/y -- the lowest

since June 2017.

     -The weaker growth on the employment front did not coincide with a shift

towards self-employed work. On the quarter the number of those in self-employed

positions fell by 12,000 in July, with those in employed positions up 1,000 over

the same period. Part-time work fell by 108,000 on the quarter, eclipsed by a

109,000 rise in full-time workers.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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