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UK: Moderation in employment growth - RBS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Ross Walker, Senior UK Economist at RBS, notes that the UK ILO employment rose by a robust 267k, 0.9% q/q, in the 3 months to November.

    Key Quotes

    “Although self-employment again made an implausibly large contribution (121k, 2.7% q/q), the more meaningful ‘full-time employee jobs’ series reported solid growth: 111k, 0.6% q/q. The separate Workforce Jobs data show a rather variable picture by sub-sector, so the employment recovery is not obviously as broad-based as the headline employment figures suggest.

    On the whole, recent survey data appear consistent with some moderation in employment growth – perhaps reflecting the sub-trend GDP growth throughout 2015. The BoE’s Agents’ Scores for January showed the weakest service sector hiring intentions since September 2013, with its manufacturing sector counterpart at lows not seen since December 2009.

    The services PMI employment index rose in January, but remains on a down-trend and a full point below its 2015 average, while the employment indices in the manufacturing and construction PMIs both deteriorated sharply.

    We forecast a rise in total employment of 230k in the three months to December. This pace of employment growth would be expected to lower unemployment by around 80k in the three months to December and nudge the unemployment rate down to 5.0%. On the claimant count measure we forecast a small fall of 2k in January, leaving the unemployment rate at 2.3%.”
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