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General Category => General News => Topic started by: NadiaWits on March 23, 2019, 12:08:00 PM
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UK jobless rate hits 44-year low; markets keep climbing – as it happened
Rolling coverage of the latest economic and financial news, including the latest UK unemployment reportLatest: Jobless rate falls to 3.9% in November-JanuaryUnemployment down by 35,000, employment up 222,000Pay up by 3.4%, pushing real wages higherInactivity down, but more people off work sickFirms may be hiring rather than investing 2.47pm GMT That’s probably all for today (although I might pop back with the market close later...)Reminder, here’s our news story on the jobs data: Related: UK unemployment falls to 44-year low despite Brexit fears 2.38pm GMT Just in: U.S. factory orders rose by just 0.1% in January, another sign that America’s economy is slowing.That matches December’s reading, and is lower than the 0.4% growth economists predicted.First Cut: January factory orders up 0.1%, same as December, held back by nondurables. https://t.co/el0Hy5CJbB pic.twitter.com/698tr7SssP 2.29pm GMT Missed this earlier, in the unemployment frenzy, but pessimism about the eurozone economy has abated.That’s according to the ZEW survey of economic confidence:Economic morale rises in the Eurozone: #ZEW Economic Sentiment rises to -2.5 from previous -16.6, better than expected -15.1, while wages rise +2.3% YoY in 4Q, as expected. Nevertheless, the German ZEW Current Conditions falls to 11.1 in March from previous 15.0 @graemewearden 1.51pm GMT Ding ding! The US stock market has opened higher, taking its lead from Europe.The Dow Jones industrial average has gained 127 points to 26,039 points. U.S. stocks open higher https://t.co/6SCqg6Lvqd pic.twitter.com/MX3FBQnMEq 1.28pm GMT The crisis in Britain’s retail sector is claiming another victim - stationary retailer Office Outlet.The company has dropped into administration this morning, putting the future of its 90 stores, and 1,200 jobs, at risk.“We are hopeful a buyer can still be found for the business in the coming weeks and we will continue to trade the business with that aim in mind.” Related: Office Outlet is latest retailer to go into administration 1.07pm GMT NIESR, the UK think tanks, reckons UK pay growth is stabilising at around 3.5% per year.That equates to 1.5% once you’ve adjusted for inflation (assuming that the cost of living keeps rising at current rates).As #Brexit #uncertainty continues firms are meeting additional demand by investing less and hiring more. As a result, #pay growth has been strong and now appears to be stabilising at around 3.5% per annum - Read our latest #NIESRWage Tracker out now: https://t.co/Z41hy5P6QbProlonged Brexit uncertainty is contributing to a situation in which firms are refraining from investment while meeting additional demand for their goods and services by raising employment. At the same time, workers have become more wary about changing jobs.As long as demand holds up, we expect this to translate into real wage growth of around 1.5 per cent in the first quarter of this year, stabilising after a robust pick-up in 2018. But lacklustre productivity growth means that wage growth is adding to inflationary pressure.” 12.59pm GMT Back in the markets, shares are continuing to rally.Europe’s Stoxx 600 index had just hit its highest level since 28 September, up 0.8% today. It’s now gained 14% so far this year, as it bounced back from last autumn’s selloff.US Opening Calls:#DOW 26023 +0.41%#SPX 2844 +0.38%#NASDAQ 7359 +0.44%#IGOpeningCallIn recent days, we have been talking up the prospects of stronger recovery in European stock markets, owing in part to the falling government bond yields as a result of major central banks like the European Central Bank turning dovish recently.The German DAX index, for example, is looking a lot healthier now.... 12.45pm GMT Here’s my colleague Richard Partington on today’s UK unemployment report:UK unemployment has dropped to the lowest level in more than 44 years despite mounting fears over Brexit, as employers across the country ramped up hiring at the fastest rate in more than three years.The Office for National Statistics said Britain’s jobless rate fell to a fresh low of 3.9% in the three months to January, down from 4% a month ago, the lowest point since the start of 1975. Related: UK unemployment falls to 44-year low despite Brexit fears 12.32pm GMT Professor Costas Miles of Liverpool University suspects that the UK labour market hasn’t, yet, caught up with the recent slowdown in growth. Here’s his take on today’s unemployment data:Today’s data suggests an unemployment rate of 4% for 2018Q4 which is fully in line with the Bank of England’s latest (in February) predictions. The 3.9% figure for December 2018 appears also in line with the Bank’s 3.9% forecast for 2019Q1. Therefore, today’s data is not really a surprise.The obvious explanation is that the unemployment rate is a lagging economic indicator and will, sooner than later, catch up with the ongoing slowdown in GDP growth. All in all, I don’t really see any emerging pressure for interest rate rises. If anything, BoE policymakers should be satisfied that economic developments unfold in line with their predictions. 12.12pm GMT The chancellor tweets:.@ONS data shows UK jobs market continues to break records:-unemployment below 4% for the first time since early 1975-female unemployment at a record low of 3.8%-employment up 222,000 to a new historic high-wages have grown faster than inflation for the 10th month in a row pic.twitter.com/7zJp5NdexL 12.07pm GMT Sky News’s Ed Conway has spotted an interesting trend:For most of recent history non-UK born workers' employment growth has far exceeded UK-born employment growth. Following the EU referendum that relationship has reversed pic.twitter.com/CQme3VDYWO 11.59am GMT MP Steve Baker is now asking the OBR about the “striking increase” in pay among the UK’s top earners.There are 31,000 people in the top 0.1% income bracket in Britain, accounting for 8% of all PAYE income tax and national insurance receipts in 2017-18. 11.30am GMT Back in parliament Sir Charlie Bean, a member of the budget responsibility committee at the OBR, is being grilled by the Treasury Committee’s Alison McGovern about a lack of focus on what’s happening to regional economies outside London.Bean rejects the idea that the watchdog isn’t concerned about the regions but adds:“We’re not asked to analyse polices that are trying to influence regional distribution.” 11.16am GMT This chart shows how UK wages have been growing faster than inflation for the last year, after a painful period of falling real pay.The long running squeeze on available labour supply is placing upward pressure on wage growth.Including bonuses, average weekly earnings for employees in Great Britain were estimated to have increased by 3.4%, before adjusting for inflation, and by 1.5%, after adjusting for inflation, compared with a year earlier. 10.39am GMT Over in parliament Robert Chote, chairman of the Office for Budget Responsibility, is appearing in front of the Treasury Committee to discuss last week’s spring statement.Under usual circumstances, the Treasury is required to give the OBR at least 10 weeks’ notice of the chosen date for the spring statement, but this year the independent forecasting group was given just six weeks’ notice. “It wasn’t ideal, you do need to Profit Taking it down to a date.”“more and more of the pieces will be put in over time.” 10.35am GMT Today’s jobs report also shows the state of Britain’s public sector, after almost a decade of austerity.Public sector employment increased by an estimated 32,000 in the last year, taking the total to 5.37 million employees.Employment in the UK public sector rose by 1.2% in the past year, the fastest increase in a decade pic.twitter.com/P1jIOekqWp 10.17am GMT Mike Jakeman, senior economist at PwC, suspects Brexit uncertainty may be helping workers -- as companies would rather hire staff than buy expensive new machinery.It may seem difficult to balance positive jobs and wage data with the fact that business investment has been shrinking for several quarters. It may be that demand in the economy is close to capacity, which is generating demand for new workers, but firms are reticent about committing to major expansion plans until more is known about Brexit. 10.15am GMT Vacancies in the UK are running at record levels, as firms struggle to find workers, today’s employment report shows.“Businesses have been steadfast in bringing on board new staff and in creating vacancies, despite question marks over the future path of the economy. Meanwhile, as unemployment has fallen, competition for a shrinking pool of workers has pushed up salaries and buoyed households.“But with uncertainty around Brexit reaching a crescendo, firms are becoming more and more cagey over their hiring decisions. 10.08am GMT UK unemployment now under 4%. The strange pattern of the last decade - whereby jobs growth seems uncoupled from economic growth - continues! 10.07am GMT The UK’s minister of state for employment, Alok Sharma, has welcomed the jobs report.... and warned MPs that they should back Theresa May’s Brexit deal or risk job losses.Sharma says:“Today’s employment figures are further evidence of the strong economy the Chancellor detailed in last week’s spring statement, showing how our pro-business policies are delivering record employment.“2019 has continued to be a record breaker, with the employment rate topping 76% for the first time, record female employment and unemployment falling below 4% for the first time in 44 years. Related: Brexit: May to chair cabinet as government responds to Bercow ruling against repeat vote on deal - Politics live 10.01am GMT The ONS has admitted that something went wrong with today’s jobs report, which is why it was released several minutes early.A spokesperson says:“Due to a problem with the release process some data were released early. In accordance with standard release practices we therefore published all data immediately.” 9.59am GMT Reuters’ Andy Bruce points out that Britain’s economy is still creating jobs at a solid pace:Big news from the ONS jobs data (published early for some reason)222,000 jump in employment in 3 months to Jan. Biggest rise since 3-months to Oct 2015. pic.twitter.com/HZUdYWeQKEeyebrows raised as jobs market figs "defy" Brexit Uncertainty BUT 1) hiring/firing tends to lag couple quarters behind activity2)as per financial crisis, workers relatively cheap so firms may be "hoarding" workers3)some jobs will have been created to aid with Brexit prep 9.59am GMT The ONS has also found that the number of people who’ve dropped out of the labour market has hit a record low of 20.7%.That’s due to a drop in student numbers, and the number of retired people.The categories that recorded decreases were students (58,000), people who were retired (50,000) and people who looked after family or home (26,000). The fall in the number of students was the largest since the three months to February 2012. The categories that increased were those of people on long-term sickness (23,000) and people who were temporarily sick (4,000).The numbers of people not in work & not looking for work (termed: "inactive") fell by 194k in the three months to January 2019, compared with three monthe to January 2018. Really broad base of drivers too: fewer students, fewer retirees, fewer looking after home/family. pic.twitter.com/MfvAlyzdZa 9.52am GMT Although average pay rose by 3.4% in the last year, earnings are STILL below their pre-crisis levels, once inflation is accounted for. 9.46am GMT The number of people in work jumped by 473,00 over the last year, to 32.71 million.Most of this was full-time jobs (up 424,000), plus 49,000 more part-time workers. 9.41am GMT The number of women classed as unemployed has hit its lowest in at least 48 years - and possibly longer.The ONS says that for November 2018 to January 2019, the unemployment rate: 9.35am GMT Average earnings are continuing to grow steadily, in the face of Brexit uncertainty.Basic pay in the UK rose by 3.4% in the three months to January, and was 3.5% higher in January alone, according to the Office for National Statistics. That’s the highest level in a decade.Excluding bonuses, average weekly earnings rose by 3.4%, before adjusting for inflation, and by 1.4%, after adjusting for inflation, compared with a year earlier. 9.26am GMT NEWSFLASH: The UK unemployment report has been released early - a highly unusual development for such market-moving data.And it shows that Britain’s jobless rate has hit a new 44-year low of just 3.9%, down from 4% last month. 9.22am GMT Just in: The Treasury committee are calling for an investigation into whether regulators blundered over the collapse of London Capital & Finance.LCF went under earlier this year, having taken around £236m from over 11,000 investors who were attracted by its promise of 8% returns on its mini-bonds/Chair @NickyMorgan01 has written to @TheFCA and @hmtreasury asking the regulator to investigate the possible regulatory failure surrounding London Capital and Finance.Full story here: https://t.co/4W0YnbD2Ae pic.twitter.com/rwVAgHz1wD 9.03am GMT Despite all the Brexit anxiety, Britain’s stock market has hit a five-month high.The FTSE 100 index has gained 35 points to 7334, extending its recent rally, to its highest level since early October. “The FTSE 100 is currently doing a good job of confounding the Cassandras, naysayers and pessimists with a capital gain of nearly 8% in 2019 to date, despite the ongoing uncertainty over global tariff and trade policies, Brexit and gathering concerns over the globe’s economic growth prospects. “The index’s advance may be the result of its valuation, since a forward price/earnings ratio of 12.5 times and a prospective dividend yield of 4.7% look attractive, both in absolute terms and also relative to the other geographic options available to equity investors. Such relatively lowly multiples could suggest that a lot of bad news is already in the price, especially after the second-half slump in the index last year. After a marked period of underperformance which stretches back to the summer 2016 referendum vote on EU membership, UK equities look unloved and may therefore be undervalued. 8.42am GMT Ouch! Shares in Bonmarché have slumped by 31% at the start of trading after it warned losses will be larger than expected this year.This rather reflects the problems brands face as the spiral of discounting starts to sap consumer confidence – shoppers now expect to see 40-50% off everything and are less satisfied with smaller discounts.Trading since the beginning of March has been significantly weaker, reversing sales gains made in the previous months. 8.28am GMT Over in the City, shares in ASOS have tumbled 9% after reporting problems at its new US venture.Our US performance was behind our plans during the period. As our Atlanta warehouse went fully online, demand far exceeded our expectations. Whilst very encouraging for the longer term, this caused a significant short-term despatch back log which we have now cleared.We continued to outperform in the UK with sales growth of 14%. Sales in Europe were up 12%, although France and Germany, our two largest markets, continue to be challenging. 8.13am GMT Jasper Lawler of London Capital Group predicts that today’s jobs report will be solid... but will probably also be overshadowed by Brexit drama:Whilst the Brexit drama continues to play out UK investors will glance towards the UK jobs report. The British labour market is strong and this is expected to be reflected in the report. Unemployment is forecast to remain at a low level of 4%. Wages excluding bonuses are expected to hold firm at 3.4% for another month. With inflation at 1.9% in January, this is strong real wage growth. This will be encouraging news for the Bank of England, who will be keeping a close eye on increasing inflationary pressures from wages, although their hands are still tied with Brexit. A strong reading could lift the pound back towards $1.33 should sentiment allow. Should the pound traders ignore a solid reading then we can assume the bias is against the pound and the trend will be pound negative. 8.01am GMT Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.The end is in sight - on pay, if not Brexit. Pay packets are now forecast to return to pre-crisis levels by 2023 - marking an end to an unprecedented 16-year pay downturn pic.twitter.com/chZfthoG1JOne of the big surprises has been the resilience of the labour market in the last few years, and despite all the reports of job losses in retail and banking in recent months, employers across a number of other sectors have consistently reported difficulty in filling vacant positions.Looks like being a quiet day ahead but UK unemployment and earnings may keep us awake at 09:30 GMT.. Firstly, it is now highly unlikely that MV3 will happen this week, though next week remains a strong possibility.Secondly, as that would leave the Commons vote the other side of Thursday’s EU Council meeting, May will likely have to go to her “default” position of requesting a long delay to the UK’s exit date in Brussels on Thursday.This morning we're holding our first evidence session on #SpringStatement2019.We'll hear from Robert Chote, Prof. Sir Charlie Bean and Andy King from the @OBR_UK.Watch it live at 10:00 here: https://t.co/ANlSR9ZTvu pic.twitter.com/GD5hx7rQCB Continue reading...
Source: UK jobless rate hits 44-year low; markets keep climbing – as it happened (https://www.theguardian.com/business/live/2019/mar/19/uk-unemployment-wages-report-house-prices-economy-brexit-sterling-business-live)