UK labour market data, PwC comments

May 14, 2019

Commenting on the latest UK labour market data, Mike Jakeman, senior economist at PwC, said:

"Unemployment fell to a new low in the current cycle, of 3.8% in March, from 3.9% in February. The proportion of people out of work has not been lower than this since 1974. But elsewhere in the data there were hints of some softness after months in which the labour market had provided unambiguously good news. Wage growth, which has been steadily marching upwards, slowed in March. Nominal growth moderated for the second month in a row, from a peak of 3.5% year on year in January down to 3.3%, while real growth slipped fractionally but remained at around 1.5%. The number of vacancies has followed a similar pattern, of a steady rise followed by a soft patch in early 2019.

"It is possible to see the shadow of Brexit in some of these figures. March was the month when Brexit anxiety was at its most acute, and it might have been the case that firms were more reticent to offer higher wages and advertise new positions in these weeks. That said, these numbers could just as easily be a minor blip and previous trends resumed in April. For now, the labour market remains one of the best performing aspects of the economy and a very, very low unemployment rate ought to continue to put upward pressure on wages in the coming months, delivering a boost to workers in their pay packets."

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