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UK Data Forecasts - July Unemployment Data

MNI (London)
Repeats Story Initially Transmitted at 11:17 GMT Sep 11/07:17 EST Sep 11
By Jamie Satchithanantham
     LONDON (MNI) - Despite the sluggish, insipid growth the UK economy
generated in the opening half of 2017, the labour market has largely held up
well and grown in strength.
     In June the 125,000 new workers, primarily full-time roles, added to the
labour market was enough to push the unemployment rate to 4.4%; this, 0.1pp
below the Bank of England's Monetary Policy Committee's estimate of the U* or
the equilibrium unemployment rate.
     Such is the momentum that the labour market has fostered in recent months,
some analysts polled in an MNI survey even see the jobless rate falling to a
fresh low of 4.3%.
     While two hold this view (Investec, Oxford Economics), the other 17 polled
expect the rate to hold firm at 4.4%. The solid gains in employment are not
expected to have tapered in July. After adding 125k t the workforce, analysts
estimate another 140k will have joined in August. 
     One area that does remain a puzzle, however, is wage growth. Despite the
tightening in the labour market and apparent reduction in slack, wage growth
remains firmly rooted in the 1.8%-2.2% range, running below the headline rate of
inflation, eroding real incomes eroded and household spending appetites.
     There are tentative signs modest growth may be stirring. On an ex-bonus and
total basis wage growth rise to 2.1% in June and it is expected to have pushed
higher in July. Total wage growth is pencilled 0.3pp higher at 2.4% 3m y/y while
ex-bonus growth is expected to move 0.1pp higher to 2.2% 3m y/y.
                         Jul                Jul           ILO                Jul
                      Weekly         Avg Weekly  Unemployment  Employment Change
                    Earnings  Earnings ex-Bonus          rate              3m/3m
                    3m % YoY           3m % YoY          3m %              '000s
Date Out              13-Sep             13-Sep        13-Sep             13-Sep
Median                   2.4                2.2           4.4              140.0
Forecast High            2.5                2.3           4.4              300.0
Forecast Low             2.3                2.1           4.3               90.0
Deviation                0.1                0.1           0.0               74.5
Count                     16                 17            19                  6
Prior                    2.1                2.1           4.4              125.0
Barclays                 2.3                2.1           4.4                N/A
Berenberg                N/A                2.2           4.4                N/A
BofAML                   2.3                2.1           4.4              160.0
Capital Economics        2.3                2.2           4.4              140.0
Credit Suisse            N/A                2.1           4.4                N/A
Commerzbank              2.5                N/A           4.4                N/A
Daiwa                    2.3                2.1           4.4                N/A
HSBC                     2.3                2.2           4.4                N/A
Investec                 2.4                N/A           4.3                N/A
JP Morgan                2.4                2.2           4.4               90.0
Lloyds TSB               2.4                2.2           N/A              300.0
Natixis                  2.4                2.1           4.4                N/A
Nomura                   2.4                2.1           4.4                N/A
Oxford Economics         2.4                2.3           4.3                N/A
Pantheon                 N/A                N/A           4.4                N/A
RBC                      2.3                2.1           4.4                N/A
Scotia                   2.4                2.2           4.4              140.0
Stan Chart               N/A                2.2           4.4                N/A
Societe Generale         2.3                2.2           4.4                N/A
UniCredit                2.3                2.2           4.4              110.0
     The most recent Recruitment and Employment Confederation/Markit labour
market report, which polls recruitment consultants across the country, reported
evidence of firms bidding higher wages in order to secure workers amid a high
competition and an acute shortage of adequate candidates.
     The permanent pay growth component of the survey rose for the fourth
consecutive month, up 0.9 points to 61.5 in August. This materialised as the
Availability Of Staff indicator remained deep in contractionary territory (35.7)
and the Jobs Vacancies Index rose to a 25-month high (65.1).
     Elsewhere, the employment component of the IHS Markit Service PMI to its
highest level for a year-and-a-half, keeping the pace of job creation elevated. 
     The survey's sister manufacturing survey also recorded businesses as having
a bullish outlook on employment. Staffing levels were up for the twelfth
straight month with the pace of expansion among the best over the over past
three years, said Markit.        
--MNI London Bureau; +44 203-586-2226; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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