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UK unemployment rate sticks at 4.9% despite Brexit vote – business live
UK jobless rate sticks at 4.9% despite Brexit vote – business live
(35 minutes later)
10.38am BST
10:38
David Cheetham, market analyst at XTB.com, points out that today’s data covers the period before the government announced it would trigger the process of leaving the EU in March 2017.
Therefore recent issues surrounding a “hard” Brexit will not be fairly reflected and any optimism should be carefully checked, with the re-emergence of concerns in recent weeks due to the plummeting value of sterling occurring in a period after which this morning’s release focuses on.
Updated
at 10.42am BST
10.32am BST
10:32
The Department for Work and Pensions tweets:
New independent stats show the employment rate is the highest since records began in 1971 pic.twitter.com/OEpakuP2X0
10.30am BST
10:30
PwC: Brexit vote could hit jobs market next year
There’s no sign of a major Brexit effect on the labour market, says John Hawksworth, chief economist at PwC.
But, the impact of the EU referendum may show up over the next year.
Hawksworth says:
“Today’s labour market data suggests some moderation in jobs growth since the EU referendum, but the unemployment rate remains broadly flat so there is no sign yet of major detrimental effects from the Brexit vote.
“Specifically, total employment rose by over 100,000 in the three months to August compared to the previous three months, which is a healthy increase but somewhat slower than the average rate of quarterly jobs growth seen over the past year as a whole. The number of people unemployed also rose by 10,000 over this period, but this reflected growth in the active labour force, so the unemployment rate remained steady at 4.9%. The more timely but less comprehensive unemployment claimant count measure also showed no material change between August and September.
“But it will take time for companies to adjust their hiring plans to the Brexit vote, so we could see some further slowdown in jobs growth over the next year.
10.28am BST
10:28
Here’s the breakdown between full-time and part-time jobs:
10.27am BST
10:27
The number of part-time workers has risen by 198,000 over the last year, to 8.58 million people.
Professor Geraint Johnes, Director of Research at The Work Foundation, says this may be a concern.
“There are continued employment gains with people still joining the labour market out of inactivity - though unemployment is slightly up. Most of the employment gains are in part-time employment.
This may reflect in part the rise of the gig economy, and is certainly worth monitoring over future months owing to the impact on job security.
Concern swelled over the summer over conditions at companies such as Uber and Deliveroo - whose workers went on strike in protest at new pay plans.
10.22am BST
10:22
Dr John Philpott, director of The Jobs Economist, isn’t worried that unemployment rose by 10,000 in the three months to August, to 1.66 million.
“The small rise of 10,000 in UK unemployment in the three months to August is disappointing news but should not be viewed as a ‘canary in the coalmine’ for any future adverse effect of the Brexit vote. Brexit may yet lead to a weaker jobs market but these latest figure are generally still very strong
10.14am BST
10.14am BST
10:14
10:14
Unemployment: the key charts
Unemployment: the key charts
This chart shows how Britain’s jobless rate is at its lowest for a decade, at just 4.9%.
This chart shows how Britain’s jobless rate is at its lowest for a decade, at just 4.9%.
The claimant count rose by 700 people -- but remains historically low. It’s usually a good signal if companies are cutting jobs.
The claimant count rose by 700 people -- but remains historically low. It’s usually a good signal if companies are cutting jobs.
Around 560,000 new jobs were created in the last year -- many in the construction sector:
Around 560,000 new jobs were created in the last year -- many in the construction sector:
But the public sector continues to shrink. It’s been falling steadily since March 2010,
But the public sector continues to shrink. It’s been falling steadily since March 2010,
There were 5.33 million people employed in the public sector in June 2016, which is the lowest since comparable records began in 1999
There were 5.33 million people employed in the public sector in June 2016, which is the lowest since comparable records began in 1999
And the number of workers from other EU countries rose again in the three months to June.
And the number of workers from other EU countries rose by 238,000 over the 12 months to June, to 2.23 million.
But the number of non-UK nationals from outside the EU working in the UK were little changed at 1.21 million.
Updated
Updated
at 10.16am BST
at 10.34am BST
10.00am BST
10.00am BST
10:00
10:00
Instant reaction to the jobs report
Instant reaction to the jobs report
Sky News’s Ed Conway reckons it’s a decent report:
Sky News’s Ed Conway reckons it’s a decent report:
Another set of strong labour market stats. And wage growth also up a touch to 2.3% https://t.co/3VHSemOj77
Another set of strong labour market stats. And wage growth also up a touch to 2.3% https://t.co/3VHSemOj77
But economist Sean Richards is concerned that the unemployment total rose by 10,000 during the quarter.
But economist Sean Richards is concerned that the unemployment total rose by 10,000 during the quarter.
So UK employment remains good with wage growth okay but any rise in unemployment is disappointing
So UK employment remains good with wage growth okay but any rise in unemployment is disappointing
Rupert Seggins believes the labour market remains robust, despite sharp regional differences:
Rupert Seggins believes the labour market remains robust, despite sharp regional differences:
So far so good - UK job market continues to tick along post-referendum. Number of unemployed people per vacancy still below pre-2008 average pic.twitter.com/94cewAyaKb
So far so good - UK job market continues to tick along post-referendum. Number of unemployed people per vacancy still below pre-2008 average pic.twitter.com/94cewAyaKb
The UK employment rate is at a joint record high, but this hides considerable disparities among its regions. S.East 78%, N. Ireland at 70.1% pic.twitter.com/MCFLdPhrIf
The UK employment rate is at a joint record high, but this hides considerable disparities among its regions. S.East 78%, N. Ireland at 70.1% pic.twitter.com/MCFLdPhrIf
9.51am BST
9.51am BST
09:51
09:51
Sterling hits eight-day high
Sterling hits eight-day high
The jobs data has driven the pound up by 0.3%, hitting $1.233 for the first time in over a week.
The jobs data has driven the pound up by 0.3%, hitting $1.233 for the first time in over a week.
Naeem Aslam of Think Markets says:
Naeem Aslam of Think Markets says:
The UK’s economic data released today has confirmed that the labour market is not showing any sign of weakness – at least not for now. This has supported the currency which is trading sharply higher.
The UK’s economic data released today has confirmed that the labour market is not showing any sign of weakness – at least not for now. This has supported the currency which is trading sharply higher.
Updated
Updated
at 9.52am BST
at 9.52am BST
9.46am BST
9.46am BST
09:46
09:46
Unemployment: the key points
Unemployment: the key points
Here are the key points from today’s jobs report (which is online here)
Here are the key points from today’s jobs report (which is online here)
9.44am BST
9.44am BST
09:44
09:44
Wages rise by 2.3%
Wages rise by 2.3%
Regular pay grew by 2.3% in the June-August quarter, up from 2.2% a month ago. That’s better than economists had expected.
Regular pay grew by 2.3% in the June-August quarter, up from 2.2% a month ago. That’s better than economists had expected.
If you include bonuses, pay also rose by 2.3% - down from 2.4%.
If you include bonuses, pay also rose by 2.3% - down from 2.4%.
9.38am BST
09:38
Employment rate at 45-year high
Britain’s employment rate is now 74.5% -- the joint highest in over 40 years.
Employment rate (for people 16-64yrs) 74.5% for Jun-Aug 2016, joint highest since records began in 1971 https://t.co/YnuEHGfLh0 pic.twitter.com/0msXeDo8Wv
And at 4.9%, the jobless rate is at a near 11-year low.
#Unemployment rate (for people aged 16+) 4.9% for Jun-Aug 2016, down from 5.4% a yr earlier https://t.co/3ImHCRYDiC pic.twitter.com/Vrh1znkpGA
9.33am BST
09:33
UK UNEMPLOYMENT RATE STICKS AT 4.9%
Breaking: Britain’s unemployment rate has come in at 4.9% in the three months to August.
That’s unchanged from last month, suggesting that June’s Brexit vote hasn’t yet hit the labour market.
The number of people finding new jobs has swelled by 106,000 in the quarter. That’s slower than in previous quarters (when around 170,000 new jobs were created) but better than expected.
And the number of people signing on for unemployment benefits has risen in September, but only by 700 citizens. That’s less than the City feared.
More to follow....
Updated
at 9.39am BST
9.28am BST
09:28
Analyst: Probably too early to see Brexit effects
Nearly time for the UK unemployment report!
Kit Juckes, currency expert at Societe Generale, predicts that unemployment and wage data will probably be pretty steady.
There still is a visible relationship between wage growth and unemployment but it takes a big fall in the latter to get a small rise in the former these days.
More likely, is that while the effect of Brexit in the labour market comes (much) later, we get no real clues from these figures.
Updated
at 9.28am BST
9.22am BST
09:22
Economists are warning that China’s economy is slowing, even though Beijing met forecasts by posting growth of 6.7% this morning (as flagged in the opening post).
China expert Marcus Wright flags up that the building sector is cooling:
With #China's GDP growth having been so reliant on the property market, cooler activity suggests slower growth. @graemewearden pic.twitter.com/ad3c5Hz7ih
Robin Bew of the Economist Intelligence Unit also points out that China’s housing boom is driving growth, for now...
#China Q3 GDP growth 6.7%, in line with our forecast. Booming housing lifting demand. Reining that in will slow economy sharply by 2018
9.03am BST
09:03
The pound is bobbing just below $1.23 this morning, as the City await the jobs report.
And the FTSE 100 has shed 7 points, dragged down by Travis Perkins after it announced its branch closure plan.
Conner Campbell of SpreadEx says traders are keen to see if UK wage growth has picked up.
The headline unemployment rate is expected to remain unchanged at 4.9% for the fourth month in a row – more pressing will be the wage growth and jobless claims data.
The former (when bonuses are included) is expected to sit steady at 2.3%, a figure that could soon be overtaken by inflation given the jump seen yesterday; the latter, meanwhile, is set to climb to 3.4k new claimants across September, the highest addition since May.
8.57am BST
08:57
Laird’s share prices looks like the north face of the Eiger this morning, after that profits warning:
Apple supplier Laird plunges most on record...cuts outlook for profit as the hoped pick-up in mobile phones production fails pic.twitter.com/enLHX0q8ur
8.55am BST
08:55
Upmarket estate agent Foxtons continues to suffer from the slowdown in London property since the EU referendum.
It reported that sales revenue in the last quarter slumped by a third to £12.2m, from £18.5m last year, and blamed:
“a continuation of reduced activity in the London property sales market”.
Foxtons has previously blamed the EU referendum for dampening demand for houses in London.
But, it’s still optimistic about the “long term fundamentals of the London property market”, and has opened seven new branches in the capital this year. So, no escape from those garish minis....
More gloom. Shares in UK electronics firm Laird have almost halved in value, after it hit the City with a profits warning.
It is blaming problems at its ‘performance materials’ division, whose products protect electronic components from heat and electromagnetic interference. Its two biggest customers are Apple and Samsung.
CEO Tony Quinlan, chief executive, said:
“We are very disappointed by these adverse developments in the mobile devices market for our Performance Materials division.
It now expects to post profits of £50m this year, down from £73.1m last year, and well shy of the £70m which City analysts had pencilled in.
According to Laird, it has suffered from a “slower production ramp” – which I think means its customers haven’t been buying as many components as it expected.
Pricing and margin pressures are also very tough, it adds.
That may be sign that the smartphone market is cooling. Samsung’s decision to scrap its Galaxy Note 7 may also be hurting Laird.
Former CEO David Lockwood quit unexpectedly in August, prompting some brokers to warn that Laird wouldn’t hit its financial forecasts for this year. They’ve been proved right.
Updated
at 8.43am BST
8.17am BST
08:17
Travis Perkins cuts 600 jobs
Britain’s biggest building supplies group, Travis Perkins, has sent a shiver through the sector by announcing plans to shut stores and cut up to 600 jobs.
The company is closing 10 distribution and fabrication centres, and 30 branches across its business, having suffered a fall in sales of plumbing and heating products.
It warned that the UK outlook was ‘uncertain’, and said it suffered from volatile demand in July and softer market conditions in August and September.
As well as running builders’ merchants, Travis Perkins also owns the Wickes DIY chain.
John Carter, chief executive, warned that:
It is still too early to predict customer demand in 2017 with certainty and we will continue to monitor our lead indicators closely. Given this uncertainty we will be closing over 30 branches and making further efficiency driven changes in the supply chain, resulting in an exceptional charge of £40-50 million this year.
Shares have dropped by 5.5% in early trading, to the bottom of the FTSE 100 leaderboard.
7.38am BST
07:38
The agenda: UK unemployment and Chinese growth figures
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Has the Brexit vote cooled Britain’s labour market, or are firms still shrugging off June’s historic referendum?
We find out this morning, when the latest unemployment figures are released, covering the period immediately after this summer’s vote.
Economists predict that the UK jobless rate remained at just 4.9% in the June-August quarter, with another 70,000 people finding work.
But they also expect wage growth to remain subdued at 2.1%, or 2.3% if you chuck in bonuses too. With inflation hitting 1% yesterday, people’s real wages could soon be squeezed.
And they also fear that the number of people claiming unemployment benefit rose by 3,200 in September, following a 2,400 jump in August.
The figures will be eagerly awaited by those who welcome Brexit, and those who fear the consequences of leaving the EU. Until now, firms have stood up to the uncertainty quite well. But the prospect of leaving the single market in 2017 may have a cooling effect soon.
Especially as Theresa May has been warned that quitting the EU customs union could wipe out 4.5% of GDP, and bog down Britain’s ports.
Wednesday's Guardian front page:Exclusive - May given dire warning over customs union#tomorrowspaperstoday #bbcpapers pic.twitter.com/GjMC7TEsem
Also on the agenda:
Chinese growth figures, released early today, have shown that its GDP expanded by 6.7% in the last quarter.
That’s bang-in-line with estimates (not for the first time), and should reassure investors that China hasn’t suffered a hard landing (yet anyway).
Construction helped to drive growth, with real estate investment jumping by 7.1% over the last year and infrastructure spending up by 19.4%. The services sector grew by 7.6%.
However, China’s National Bureau of Statistics warned that the transition to a consumer-driven economy is challenging, saying:
“We must be aware that economic development is still in a critical period of transformation, with old growth drivers to be replaced by new ones,.
With unstable and uncertain domestic and external factors, the foundation for continued economic growth is not solid enough.”
So we’ll see how analysts react to that.
Also...consumer goods group Reckitt Benckiser, building materials group Travis Perkins, electronics group Laird, and confectionary maker Hotel Chocolat are all reporting financial results.
And at 6pm, Bank of England chief economist Andy Haldane is giving a speech at the Cass Busines School.
It will cover a new staff paper, also being released at 4pm today, called “QE – the story so far”.
That will be worth checking, given the prime minister’s recent criticism of quantitative easing.
We may not get the text of Haldane’s speech, though....
