PwC comments on December's labour market data

Feb 18, 2020

Jing Teow, economist at PwC, commented:

"The UK labour market painted a more positive picture in December with the employment rate reaching record highs, mainly driven by more women entering paid work. Following consecutive declines in vacancies since the start of 2019, the three months to January also saw an increase in the number of vacancies over the previous quarter. 

This picture is consistent with the stronger-than-expected recovery in GDP in December, providing further signals that business confidence is turning a corner as the fog of uncertainty lifts. There is currently very little slack in the economy with the unemployment rate edging down even further while vacancies remain high by historical standards. 

That said, while December also saw a recovery in real weekly earnings to pre-crisis levels, momentum in earnings growth - both in real and nominal terms - shows signs of fading. The rebound in employment and slightly weaker pay growth suggests that the Bank of England is under less pressure next month to cut rates to boost the economy."

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