UK jobs market shines, but clouds on horizon

UK jobs market shines, but clouds on horizon

By Andy Bruce, David Milliken

 

523.JPG

FILE PHOTO: A pedestrian walks past an employment centre in London August 17, 2011. REUTERS/Suzanne Plunkett//File Photo

 

LONDON (Reuters) - Britain’s labour market showed unexpected strength in the second quarter, in sharp contrast with figures last week that showed the economy contracted over the same period as the country gears up for Brexit.

 

Total earnings growth including bonuses rose by an annual 3.7% in the three months to June - the highest rate since June 2008 and up from 3.5% in May, and in line with forecasts in a Reuters poll of economists.

 

The jobs market has been a silver lining for the economy since the Brexit vote in June 2016, something many economists have attributed to employers preferring to hire workers they can later lay off rather than making longer-term commitments to investment.

 

Tuesday’s figures showed Britain created 115,000 jobs in the second quarter, bringing the level of employment to a record 32.811 million, the Office for National Statistics (ONS) said.

 

“The jobs market remains a source of strength for the UK economy, though it may now be reaching its peak,” said Tej Parikh, chief economist at the Institute of Directors.

 

Sterling showed little reaction to the data, which tend to lag broader trends in the economy and had also appeared healthy in the lead-up to the financial crisis.

 

Excluding bonuses, annual pay growth picked up to 3.9% from 3.6%, the ONS said, compared with the poll forecast for growth of 3.8%.

 

A little of the strength in the pay data reflected the unusual timing of annual pay rises for public health workers in 2018, when a larger-than-normal increase was deferred until July.

 

Some details pointed to tougher times ahead, after data last week showed the economy unexpectedly shrank by 0.2% in the three months to June.

 

The unemployment rate rose to 3.9%, against expectations for it to hold steady 3.8%, and while employment growth far exceeded forecasts, part-time rather than full-time jobs accounted entirely for the increase.

 

Output per hour, the headline measure of productivity, fell 0.6% in annual terms - the fourth quarter of decline in a row and the longest such run since mid-2013.

 

Poor productivity is one of Britain’s biggest economic challenges and, until recently, had contributed to a decade of weak pay growth.

 

The number of job vacancies, an indicator of future employment, fell to 820,000 in the three months to July from 824,000 in the period to June, the lowest level in more than a year.

 

Some recent surveys of companies have suggested employers are turning more cautious about hiring as new Prime Minister Boris Johnson has pledged to take Britain out of the European Union on Oct. 31, with or without a deal.

 

The Bank of England said this month it saw signs of a softening in labour market indicators.

 

reuters_logo.jpg

-- © Copyright Reuters 2019-08-13
Follow Thaivisa on LINE for breaking Thailand news and visa info
latest news from World

Kenya classroom collapse kills seven children, injures 64  NAIROBI (Reuters) - Seven children were killed and 64 injured when a classroom collapsed as students were starting their morning lessons at a school in Kenya’s capital Nairobi on Monday, officials said. Television stations showed images of...

READ MORE...

UK PM Johnson says: don't expect Brexit breakthrough in New YorkBy Kylie MacLellan FILE PHOTO: Britain's Prime Minister Boris Johnson meets with Qatar's Emir Sheikh Tamim bin Hamad Al Thani at Downing Street in London, Britain September 20, 2019 Frank Augstein/Pool via REUTERS/File Photo NEW YORK...

READ MORE...

Bomb disposal officers respond to suspect package at UK's Manchester Airport Police officers are seen as a suspect package was found at Manchester Airport, in Manchester, Britain September 23, 2019. REUTERS/Phil Noble LONDON (Reuters) - Bomb disposal officers carried out a controlled explosion on...

READ MORE...

British Labour leader Corbyn faces showdown with party members over BrexitBy Elizabeth Piper and William James Britain's Labour Party leader Jeremy Corbyn delivers his keynote speech at the Labour Party Conference in Liverpool, Britain, September 26, 2018. REUTERS/Phil Noble/Files BRIGHTON,...

READ MORE...
sponsors