United Kingdom: Unemployment rate inches down in May-July, wage growth remains firm
September 10, 2019
The unemployment rate dipped to 3.8% in May-July from 3.9% in the previous rolling quarter, marking the joint-lowest rate since the 1970s. However, employment growth was fairly mild, a potential sign of the labor market losing steam amid elevated Brexit uncertainty. Encouragingly, nominal earnings growth was strong at 3.8%, down only slightly from the previous month’s ten-year high and comfortably outpacing inflation.
Looking ahead, the labor market should continue to support the economy, although Brexit uncertainty could keep a lid on hiring in the coming months. Our panelists see the unemployment rate ticking up marginally going forward but staying low, while nominal wage growth should keep outpacing inflation, supporting household spending.
Author: Oliver Reynolds, Economist