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You can find the current article at its original source at https://www.theguardian.com/business/live/2016/oct/19/markets-uk-unemployment-wage-growth-brexit-report-business-live
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| UK jobless rate sticks at 4.9%, but TUC fears pay squeeze – business live | UK jobless rate sticks at 4.9%, but TUC fears pay squeeze – business live |
| (35 minutes later) | |
| 11.56am BST | |
| 11:56 | |
| Another handy chart from the Resolution Foundation: | |
| UK maintains record employment but threat of fresh pay squeeze grows stronger - @MattWhittakerRF on @ONS stats today https://t.co/dZ3wSPjcet pic.twitter.com/YNfbpDpwjY | |
| 11.52am BST | |
| 11:52 | |
| Martin Beck, senior economic advisor to the EY ITEM Club, also fears a pay squeeze is looming: | |
| Pay still appears to be unresponsive to what is a fairly tight labour market, meaning rising inflation will take its toll on living standards. | |
| 11.41am BST | |
| 11:41 | |
| While the unions worry about pay and inflation, small business leaders are fretting about how they’ll keep their firms growing in the current uncertain climate. | |
| Mike Cherry, National Chairman at the Federation of Small Businesses (FSB), hopes that chancellor Philip Hammond will lend a hand in next month’s Autumn Statement: | |
| “As more people enter the Labour market and look for work, it will be more important than ever for the Government to support small businesses to keep creating jobs. | |
| “Small businesses are resilient but face significant challenges from faltering levels of confidence and higher costs from policy changes like the National Living Wage. As the Autumn Statement approaches, it is crucial the Government doesn’t place extra burdens on business, prioritises long-term investment, enterprise policy and innovation, and reaffirms the commitment to permanently increase business rate relief. | |
| 11.15am BST | 11.15am BST |
| 11:15 | 11:15 |
| Sam Hill of RBC Capital Markets also fears a wage squeeze next year, echoing the TUC’s concerns. | Sam Hill of RBC Capital Markets also fears a wage squeeze next year, echoing the TUC’s concerns. |
| He believes earnings are unlikely to keep pace with inflation, especially if the economy slows sharply: | He believes earnings are unlikely to keep pace with inflation, especially if the economy slows sharply: |
| Against the expectation of a material slowdown in economic growth in 2017, it seems unlikely that wage growth will break above the “two-point-something” range it has roughly resided in since early 2015. | Against the expectation of a material slowdown in economic growth in 2017, it seems unlikely that wage growth will break above the “two-point-something” range it has roughly resided in since early 2015. |
| After yesterday’s news of a faster-than-expected jump in CPI inflation to 1.0% y/y, and the high probability of further upward pricing pressure to come, the main theme of this week’s economic data is the emerging trend of a squeeze on living standards | After yesterday’s news of a faster-than-expected jump in CPI inflation to 1.0% y/y, and the high probability of further upward pricing pressure to come, the main theme of this week’s economic data is the emerging trend of a squeeze on living standards |
| One important theme for the UK economy in 2017 is likely to be the headwinds faced by the household sector in trying to maintain their recent robust rates of real-terms consumption growth. | One important theme for the UK economy in 2017 is likely to be the headwinds faced by the household sector in trying to maintain their recent robust rates of real-terms consumption growth. |
| 11.04am BST | 11.04am BST |
| 11:04 | 11:04 |
| Workers face pay squeeze unless wages rise | Workers face pay squeeze unless wages rise |
| The TUC are worried that workers are heading for a wage squeeze, if pay doesn’t pick up to match rising prices. | The TUC are worried that workers are heading for a wage squeeze, if pay doesn’t pick up to match rising prices. |
| Today’s figures show that average earnings grew by 2.3% in the June-to-August quarter (see here), but that doesn’t include the impact of inflation. | Today’s figures show that average earnings grew by 2.3% in the June-to-August quarter (see here), but that doesn’t include the impact of inflation. |
| In real terms, regular pay for employees in Great Britain increased by 1.7%, because inflation was 0.6% in August. | In real terms, regular pay for employees in Great Britain increased by 1.7%, because inflation was 0.6% in August. |
| This chart from the ONS shows how real wage growth peaked in summer 2015, but has fallen back since: | This chart from the ONS shows how real wage growth peaked in summer 2015, but has fallen back since: |
| We learned yesterday that inflation jumped to 1% in September, and many economists believe it will soon rise over 2%. | We learned yesterday that inflation jumped to 1% in September, and many economists believe it will soon rise over 2%. |
| TUC general secretary Frances O’Grady fears that pay packets are going to be eroded by the rising cost of living. | TUC general secretary Frances O’Grady fears that pay packets are going to be eroded by the rising cost of living. |
| Pay growth remains weak by historical standards, and inflation is getting higher. The worry is that families are heading towards another fall in living standards. | Pay growth remains weak by historical standards, and inflation is getting higher. The worry is that families are heading towards another fall in living standards. |
| “Working people must not be left to pay the price of Brexit through lower wages and higher inflation. The Chancellor must use the Autumn Statement to protect growth and create well-paid work by investing in the construction of roads, railways and homes. And he must protect the living standards of the lowest paid workers by increasing the minimum wage.” | “Working people must not be left to pay the price of Brexit through lower wages and higher inflation. The Chancellor must use the Autumn Statement to protect growth and create well-paid work by investing in the construction of roads, railways and homes. And he must protect the living standards of the lowest paid workers by increasing the minimum wage.” |
| Matt Whittaker, Chief Economist at the Resolution Foundation, also fears a pay squeeze: | Matt Whittaker, Chief Economist at the Resolution Foundation, also fears a pay squeeze: |
| “Today’s figures show that in contrast to the volatility for Sterling, the Brexit vote hasn’t had any immediate impact on the UK labour market, which remains strong and resilient on jobs but disappointing on productivity and pay. | “Today’s figures show that in contrast to the volatility for Sterling, the Brexit vote hasn’t had any immediate impact on the UK labour market, which remains strong and resilient on jobs but disappointing on productivity and pay. |
| “However, yesterday’s jump in inflation sounds a warning that unless we see significant step up in pay settlements soon we risk being on course for a fresh pay squeeze next year, having barely recovered from the last one.” | “However, yesterday’s jump in inflation sounds a warning that unless we see significant step up in pay settlements soon we risk being on course for a fresh pay squeeze next year, having barely recovered from the last one.” |
| This chart, from Resolution, shows how real wages were squeezed for several years after the financial crisis: | This chart, from Resolution, shows how real wages were squeezed for several years after the financial crisis: |
| [Confession: Real wages haven’t actually fallen, as my headline briefly claimed. Apologies for the confusion] | [Confession: Real wages haven’t actually fallen, as my headline briefly claimed. Apologies for the confusion] |
| Updated | Updated |
| at 11.27am BST | at 11.27am BST |
| 10.38am BST | 10.38am BST |
| 10:38 | 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. | 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. | 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 | Updated |
| at 10.42am BST | at 10.42am BST |
| 10.32am BST | 10.32am BST |
| 10:32 | 10:32 |
| The Department for Work and Pensions tweets: | 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 | New independent stats show the employment rate is the highest since records began in 1971 pic.twitter.com/OEpakuP2X0 |
| New independent stats show the number of women in work has risen in every region and nation of the UK since 2010 pic.twitter.com/0V9ykTyx9G | New independent stats show the number of women in work has risen in every region and nation of the UK since 2010 pic.twitter.com/0V9ykTyx9G |
| Updated | Updated |
| at 11.18am BST | at 11.18am BST |
| 10.30am BST | 10.30am BST |
| 10:30 | 10:30 |
| PwC: Brexit vote could hit jobs market next year | 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. | 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. | But, the impact of the EU referendum may show up over the next year. |
| Hawksworth says: | 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. | “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. | “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. | “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 | 10.28am BST |
| 10:28 | 10:28 |
| Here’s the breakdown between full-time and part-time jobs: | Here’s the breakdown between full-time and part-time jobs: |
| 10.27am BST | 10.27am BST |
| 10:27 | 10:27 |
| The number of part-time workers has risen by 198,000 over the last year, to 8.58 million people. | 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. | 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. | “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. | 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. | 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 | 10.22am BST |
| 10:22 | 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. | 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 | “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 by 238,000 over the 12 months to June, to 2.23 million. | 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. | 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 10.34am 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%. |