UK labour market data, October 2016 - PwC comments

Published at 10:15 AM on 19 October 2016

In response to today’s UK labour market figures, John Hawksworth, chief economist at PwC, commented:

"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.

“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.

“Average earnings growth also remained fairly steady at 2.3%. For the moment, this is still well ahead of consumer price inflation of 1%, but we expect this real earnings gap to close over the next year as the weaker pound and somewhat higher global oil prices push consumer price inflation back up above 2% over the next year. This will tend to dampen consumer spending growth in 2017, though we still expect only a slowdown in the economy next year not a recession.”

 

Ends.

For further information please contact Tilly Parke: [email protected] / +44 20 7804 8761


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