United Kingdom: Labor market remains robust in March-May
In the March-May period, the unemployment rate remained at a multi-decade low of 3.8%, while nominal earnings growth excluding bonuses picked up to 3.6% from 3.4% in the prior rolling quarter. Earnings growth was likely supported in part by an increase in the minimum wage from April. That said, there were signs of a loss of momentum: employment growth undershot expectations, while the employment rate dipped—the first quarterly decrease in close to one year—and the number of job vacancies continued to ebb.
Looking ahead, the labor market should remain a source of strength, although Brexit uncertainty could keep a lid on hiring in the coming months. Our panelists see unemployment ticking up slightly from its current level, but staying low by historical standards, while nominal wage growth should continue to comfortably outpace inflation; in its May Inflation Report, the Bank of England penciled in 3% growth in total pay for 2019.