MNI DATA IMPACT: UK Labour Market Solid Ahead Virus Shock

By Laurie Laird

     LONDON (MNI) - The UK labour market displayed unexpected resilience in

March, ahead of the U.K.'s economic lockdown in the latter part of the month,

extending an extraordinary run of job creation .

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

Tuesday by the Office for National Statistics, which noted the data largely

predated the coronavirus impact.

     - The claimant count rose by 12,100 in March, well below expectations of a

rise of between 30,000 and 650,000, taking the claimant rate to 3.5%, from a

downwardly-revised 3.4% in February. The data were collected on 12 March, ahead

of the announcement the national lockdown on March 23.

     - A new series created with data from HMRC recorded a modest 0.06% decline

in employees remunerated through PAYE channels between February and March. The

series was created by averaging daily employment levels (rather than survey

data) throughout the month and covers more than 29 million workers, according to

a National Statistics official.

     - According to data now regarded as history, the labour market showed

little sign of strain ahead of the coronavirus shock. Employment grew by a

higher-than-expected 172,000 in the three months to February, with women

accounting for 83% of those new roles.

     - The employment rate increased to a record-high 76.6%, while the perceived

availability employment pulled job-seekers back into the market, pushing the

inactivity rate down to a record low of 20.2%. That influx of available workers

lifted the unemployment rate to 4.0% from 3.9% in the three-months to January.

     - As job creation continued apace in the three months to February, weekly

hours slipped to 31.8, the lowest level since the three months to April of 2018.

The more up-to-date vacancy measure fell by 6,000 in the first quarter to

795,000, the lowest level since the three months to August of 2017.

     - Earnings growth slowed by much more than expected, with total earnings

rising by 2.8%, the slowest pace in two years. Excluding bonuses, wage growth

declined to an annual pace of 2.9%, down from 3.1% in the previous three months.

Real earnings also slowed, with inflation-adjusted wages excluding bonuses

increase by an annual rate of 1.3%, the slowest pace since the final three

months of 2018.

     - Future data could be compromised, as the ONS has experienced a reduced

response rate in conducting household and business surveys, with the agency

warning of the impossibility of imputing data based on previous responses, given

the unique circumstances surrounding coronavirus layoffs.

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

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