UK Unemployment Rate Lowest Since 1975, Earnings Growth Exceeds Forecast
16 Agosto 2017 - 09:35AM
RTTF2
The UK unemployment rate declined further in the second quarter
to the lowest level in 42 years and earnings growth exceeded
expectations, but continued to lag behind inflation, squeezing
consumers' disposable income.
The ILO unemployment rate fell to 4.4 percent in the second
quarter from 4.9 percent a year ago, data from the Office for
National Statistics showed Wednesday. This was the lowest since
1975.
Economists had forecast a rate of 4.5 percent, the same as seen
in the three months to May.
The number of unemployed decreased by 57,000 from the first
quarter to 1.48 million.
The employment rate was 75.1 percent, the highest since
comparable records began in 1971.
Average earnings including bonuses increased 2.1 percent
annually in the second quarter, faster than the expected 1.8
percent. Nonetheless, this was weaker than current inflation of 2.6
percent.
The latest labor market figures showed some signs that the
tightening in the labor market may be at long last leading to a
recovery in wage growth and provide us with optimism that the real
pay squeeze should come to an end next year, Ruth Gregory, an
economist at Capital Economics, said.
If the pick-up in wage growth is sustained, consumers won't rein
in their spending, increasing the chance of an earlier interest
rate hike, the economist added.
In the Inflation Report, the Bank of England had projected
average earnings to grow 2 percent this year and 3 percent next
year.
The ONS report also showed that the claimant count held steady
at 2.3 percent in July. The number of people claiming unemployment
benefits decreased by 4,200 from June.
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