PwC economist Jing Teow comments on July's labour market data:
"The proportion of people out of work remains very low, with the unemployment rate at 3.8% in the three months to July. Overall wage growth has continued to improve since the original Brexit deadline in March, with nominal wage growth rising to 4.0%. Real wages also rose at their quickest rate in nearly four years, delivering a boost to workers’ pay packets.
This evidence of continued jobs growth, together with yesterday's stronger than expected GDP data for July, reinforces our view that the UK should avoid a technical recession in the third quarter. Indeed, our latest GDP nowcasting model estimate, based on a machine learning analysis of a broad range of timely economic indicators, points to potential GDP growth of 0.4% in the third quarter of 2019. This would more than reverse the 0.2% GDP decline seen in the second quarter.
However, there are some signs of softening in the labour market, notably the continued decline in job creation and vacancies, which point to continued uncertainty as businesses wait and see how Brexit plays out before making firm hiring plans. The UK growth outlook beyond the current quarter remains unclear due both to alternative Brexit scenarios and to uncertainty around the global economic outlook."
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