United Kingdom: Employment rebounds in August-October; wage growth stays robust
December 17, 2019
The unemployment rate was stable at 3.8% in the August-October period, a multi-decade low. Moreover, employment was up 24,000—confounding market expectations of a contraction—on higher full-time jobs, while regular pay growth (excluding bonuses) notably outstripped inflation. These signs suggest a firming of the labor market following several months of soft readings. That said, job vacancies continued to decline, suggesting firms were somewhat cautious about hiring. Looking further ahead, the evolution of trade negotiations with the EU will have a key bearing on the labor market.
Commenting on the figures, James Smith, an economist at ING, noted: “the official jobs data doesn't look quite as bad as other hiring indicators have signalled. But with Brexit uncertainty already making a comeback and investment set to remain low in 2020, hiring appetite is unlikely to improve significantly any time soon […] it’s probably too early to make firm conclusions about where the jobs' market is headed.”
Author: Oliver Reynolds, Economist