Rolling coverage of the latest UK labour market statistics, and other events across the markets
- Introduction: UK labour market stats out today
- Pay rises (including bonuses) may have jumped to 2.5%
- But employment may have fallen again
The pound is creeping up this morning, on hopes that today’s jobs report will show that pay growth (including bonuses) has jumped to 2.5% in the last quarter.
Sterling has gained 0.2% against the US dollar to $1.334, and is a little higher against the euro too at €1.136.
Although Britain’s unemployment rate remains encouraging, sentiment could easily take a hit if wage growth fails to meet market estimations.
A situation where pay growth fails to pick up is likely to continue squeezing consumers, especially in view of inflation jumping to its highest level in almost six years at 3.1%.
Economist Rupert Seggins has created some useful charts to explain today’s labour market report (which is released in 45 minutes):
1. UK unemployment rate figures today – consensus is for a fall to 4.2%, which would be the lowest rate since the 3 months to May 1975. pic.twitter.com/3SHy1Rub9z
2. Yesterday’s inflation figures mean the pay squeeze is set to continue. Real regular pay set to fall c. 0.7%y/y (-0.6%y/y if you prefer CPIH). pic.twitter.com/UVjVkgI8iE
The big news last month was the 14,000 person fall in employment. Consensus is for a fall of 48,000 in October. pic.twitter.com/asbnQWfCdm
4. A sizeable 117,000-person rise in inactivity last month. More students and more people long-term sick. Meanwhile no’s of retired & people looking after family fell. pic.twitter.com/9aOIv3uXn9
In the City, shares in Dixons Carphone have jumped by 7.5% in early trading after it reported its best ever Black Friday trading.
That makes amends for a 60% tumble in pre-tax profits over the six months to 28 October, when Dixons Carphone suffered from a slowdown in mobile phone sales.
Half year results out today good like for like trading profits impacted by non trading one off items flagged in August. We make most of our profit in the second half and are forecasting to be in line with market. All in all thank you for your heroic work this year!
Mike van Dulken of Accendo Markets is hoping for a cheering unemployment report today:
UK Unemployment (9:30am) is expected to drop to a fresh 42-year low of 4.2%, while Average Earnings (incl. bonus) accelerate to a 2017 high of 2.5% (still shy of inflation, which hit a new multi-year high of 3.1% yesterday) and the ex-bonus print holds firm at 2.2%.
Here are the City consensus forecasts for today’s UK jobs report:
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The important element here will be hourly wages, which could give an indication as the extent to which UK household purses are being squeezed. Average hourly wages are expected to be 2.5% in the three months to October, which is a respectable 0.3% increase from the three months to September.
This would represent a rare closing in the gap since Brexit, between the cost of living and wage growth.
Yellen’s press conference should prove to be a non-event given her recent testimony in Congress and that she will soon be stepping down once Powell is confirmed. The bigger question therefore is whether the Fed will significantly alter its economic and rates projections.
Our US colleagues’ view is that they would prefer to wait until March to make significant upgrades when they are likely to be in a better position to model the impact of the looming tax plan.