UK Analysis: May-July Jobless Down; Real Earnings Still Negative>

-UK May-July Real Regular Earnings -0.4% 3m/year-ago vs -0.5% Apr-June

-UK May-July LFS Unemployment Rate 4.3% vs 4.4% April-June

-UK May-July Employment +181,000; employment rate 75.3%

By Laurie Laird and Jamie Satchithanantham

     London (MNI) - UK unemployment fell to a new four-decade low in the 

three months to July, but the strong pace of job creation has failed to 

translate into wage growth, with inflation-adjusted earnings declining 

for the fifth consecutive three month period. 

     Joblessness, as measured by the Labour Force Survey, slipped to 

4.3% between May and July, below the MNI median forecast of 4.4%, from 

 4.4% in the three months to June, the lowest level of unemployment 

since the three months to May of 1975 when it stood at 4.2%. 

     The outturn fell short of the 4.4% jobless rate forecast of Bank of 

England staff for the three months to July, as published in the August 

Quarterly Inflation report. 

     Nominal wage growth fell well short of expectations, leaving 

earnings in negative territory. Total weekly earnings increased by an 

annual pace of 2.1% in the three months to July, well below the MNI 

median forecast of 2.4%, matching the 2.1% gain in the previous three 

months. 

     But with inflation at 2.6% in July, real wages, including bonuses, 

actually declined by 0.4% in the latest period. However the decline is 

less than the peak 0.6% fall suffered in the three months to May. 

     In the month of July, total earnings rose by an annual rate of 

1.4%, but real wages declined by 1.2% over the same month of 2016. 

     Excluding bonuses, regular earnings, before adjusting for 

inflation, also improved by an annual pace of 2.1% in the three months 

to July, below the MNI median of a 2.2% gain, unchanged from the 

previous period. Price-adjusted regular earnings fell by 0.4% over the 

same period a year earlier.  

     Regular earnings rose by an annual rate of 2.0% in the month of 

July, but fell by an annual rate of 0.5% in real terms. 

     Employment surged by 181,000 to 32.14 million, compared to the 

median MNI forecast of an 140,000 jump, after a increase of 125,000 in 

the three months to June. That took the employment rate to a record-high 

75.3%. Employment has now increased by more than 100,000 for five 

consecutive three-month periods, according to a National Statistics 

official. 

     Unemployment fell by 75,000 between May and July, the biggest 

decrease since the three months to November of 2015, to 1.46 million, as 

inactivity declined by 107,000 to 8.74 million, taking the inactivity 

rate a record-low 21.2%. 

     The number of workers inactive due to looking after family and home 

declined by 108,000 in the three months to July, the largest fall since 

the series began in 1971, according to the official. 

     The number of self-employed workers rose by 43,000 to a record-high 

4.848 million, taking the self-employed to a joint record high of 15.1% 

of all workers. 

     The jobless rate rose to 4.4% in the month of July, according to 

experimental data, from 4.2% in June. 

     The more up-to-date claimant count fell by 2,800 in August, leaving 

the associated unemployment rate at 2.3%, unchanged from June. 

     The claimant count for July was revised to show a 2,900 decline, 

compared to the 4,200 fall reported last month. 

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

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