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UK jobs report surprise; unemployment lowest since 2008 - ING

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – James Knightley, Research Analyst at ING, notes that the UK labour report shows very strong employment growth of 207k in the three months to October.

    Key Quotes

    “This is the strongest figure since February and was significantly higher than the 150k consensus. It also means that the unemployment rate has fallen to 5.2%, the lowest rate since May 2008.”

    “The only disappointment was on pay. Wage growth excluding bonuses fell to 2.0% from 2.4%YoY (consensus 2.3%) with the BoE recently suggesting that low CPI readings may be helping to keep a lid on wage demands despite the obvious tightness in the labour market. In this regard, the number of people claiming out of work benefits is 796k while there are currently 747k job vacancies. Given this lack of labour market slack we think wage growth will gradually pick-up again.”

    “Overall, it is positive news in that real household disposable incomes look in very good shape, which should be supportive for confidence and spending. Modest wage growth also means that the BoE has room to leave monetary policy ultra-accommodative with Governor Carney’s dovish shift suggesting there is little prospect of the BoE quickly following the Federal Reserve with higher interest rates.”
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