MNI DATA IMPACT: UK Earnings Plummet, Employment Resilience

--Vacancies Creep Up in Early June, According to Survey Data

By Laurie Laird

     LONDON (MNI) - Earnings plummeted in the three months to April, even as

employment showed unexpected resilience, courtesy of the government's furlough

scheme.

     The following are the main points from the latest labour data released on

Tuesday by the Office for National Statistics.

     - Total earnings rose by an annual rate of just 1.0% in the three months to

April, the slowest pace since early 2009, dampened by a 0.9% fall in March, the

biggest decrease since April 2014. Adjusting for inflation, earnings declined by

0.4% in the latest three months, the first dip into negative territory since

September 2017.

     - The unemployment rate defied expectations of a sharp rise, steady at 3.9%

in the three months to April, despite the economic shutdown that took effect on

March 23. An increase in economic inactivity kept the rise in unemployment in

check, according to an ONS official.

     - Employment, measured by the number of workers on PAYE schemes, declined

by a total of 612,000 in April and May, down 2.1% from the March level.

     - Vacancies declined by a record-high 342,000 in the three months to May to

476,00, the lowest level since the second quarter of 2012. However, Adzuna data

tracked by the ONS suggest that vacancies increased modestly at the start of

June, after levelling off during the latter weeks of May.

     - Hours per employed worker increased slightly to 29.1 in the three months

to April from the 24.8 touched in the final week of March.

     - The unexpected resilience of the labour market may delay discussions of

another reduction in interest rates when the Bank of England's Monetary Policy

Committee meets on Wednesday. Governor Andrew Bailey and other MPC members have

refused to rule out negative interest rates over recent weeks.

     - The claimant count surged by a record-high 529,000 in May, taking the

number of claimants to 2.8 million, the highest level since October of 1993.

That lifted the claimant rate to 7.8%, the highest since March of 1995.

     - However the claimant count "almost certainly ends up overstating any

underlying change in unemployment" according to a blog posted by Deputy National

Statistician Jonathan Athow on Monday. The claimant count includes all

applicants for Universal Credit, a bigger sample than those applying only for

JobSeekers' Allowance.

     - National statisticians expressed confidence in the reliability of the

data, with response rates for survey of earnings data falling only slightly to

78%, from a normal response rate of 80-83%. The response rate for the labour

force survey, which undergirds the unemployment data, represented 85-90% of the

historical rate.

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

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