United Kingdom: Labor market remains strong in February-April period
In the February-April period, the unemployment rate remained at a multi-decade low of 3.8%, while the employment rate was the joint-highest on record. Moreover, nominal earnings growth excluding bonuses picked up to 3.4% from 3.3% in the prior rolling quarter, on stronger public-sector pay growth. These indicators signal that the labor market remains in good health. That said, employment growth ebbed, while the number of salaried workers declined and job vacancies continued to dip, hinting at a possible loss of momentum.
Looking ahead, 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. Our panelists see unemployment ticking up slightly from its current level, but staying low by historical standards. These robust labor market dynamics should support private consumption.