Investment Clock insights

Mixed labour data despite rise in earnings

Ian Kernohan, Economist

13 December 2017

Today we saw a mixed set of labour market data, with total employment falling by 56,000 in the three months to October, combined with a slight fall in the employment rate. Unemployment fell by 26,000 in the three months to October, 182,000 fewer than a year earlier and the unemployment rate remained at 4.3%, down from 4.8% a year earlier and the joint lowest level since 1975. 

Average weekly earnings rose by 2.5% year on year and by 2.3% when bonuses are excluded.  In real terms, after taking account of rising inflation, real earnings growth is still negative, however we expect this situation to improve next year as inflation falls back. 

There was nothing in the data to suggest that the Bank of England should quicken the pace of policy tightening and we expect interest rates to remain on hold well into next year.

Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.