MNI DATA ANALYSIS: UK Q4 Employment Soars; Wage Growth Holds>

-UK Q4 Employment +167,000; employment rate joint-record 75.8%

-UK Q4 Total Earnings +3.4% 3m/year-ago unchanged from Sep-Nov

-UK Q4 Real Total Earnings +1.3% 3m/year-ago; highest since 3m to Nov 16

-UK Q4 LFS Unemployment Rate 4.0%; Dec up to 4.1% from 3.8% in Nov

By Laurie Laird, David Robinson and Les Commons

     London (MNI) - UK wage acceleration stalled unexpectedly in the 

fourth quarter, even as employment growth soared, although experimental 

data suggest job creation may have been concentrated in the months of 

October and November. 

     Employment rose by 167,000 to 32.6 million, after an increase of 

132,000 in the three months to November, above market forecasts of a 

140,000 gain. Jobs growth in the previous period was revised downward 

from a 141,000 gain after annual revisions to back data. 

     That matched the joint-record-high of 75.8% recorded in the three 

months to November and left joblessness, as measured by the Labour Force 

Survey, at 4.0% in the three months to December, in line with market 

expectations. 

     However, unemployment rose to 4.1% in December from a record-low of 

3.8% in November, according to experimental statistics, during a month 

in which gross domestic product declined by 0.4%. National statisticians 

did express caution in regarding the monthly jobless outturn as 

representative of the entire country. 

     The outturn matched the 4.0% jobless rate forecast of Bank of 

England staff, as published in the November Quarterly Inflation report. 

Members of the Bank's Monetary Policy Committee noted survey evidence of 

"a softening in employment growth" at their February rate-setting 

meeting. 

     However, nominal earnings growth fell short of market expectations, 

stagnating in the fourth quarter. Total weekly earnings increased by an 

annual pace of 3.4% in the fourth quarter, unchanged from the three 

months to November, falling short of the expected 3.5% gain. 

     With inflation falling to an annual rate of 2.1% in December, real 

wages, including bonuses, rose by 1.3% in the latest period, the fastest 

pace since the three months to November 2016. 

     However, the Office for National Statistics uses the CPIH measure 

to discount nominal wages, which hit an annual rate of 2.0% in December, 

or 0.1 percentage point below the price measure targeted by the Bank of 

England. When discounted by CPI, real total wage growth rose by 1.2%, 

according to a National Statistics official. 

     Bank of England rate setters expect further acceleration in real 

wage growth, according to the minutes of the February MPC meeting, but 

members cautioned that the improvement will largely result from a dip in 

inflation, rather than further gains in nominal wage growth. CPI, as 

targeted by the Bank, slipped to an annual rate of 1.8% in January. 

     Excluding bonuses, regular earnings, before adjusting for 

inflation, improved at an annual pace of 3.4% in the fourth quarter, 

unchanged from the previous period. 

     Price-adjusted regular earnings, discounted by CPIH, rose by 1.2% 

over the same period a year earlier, matching the pace recorded in the 

previous three months. 

     However, job vacancies rose 16,000 to 870,000, the highest since 

records began in 2001, which could continue to support wages over the 

short term. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]