| Consensus | Actual | Previous | Revised | Consensus Range | |
|---|---|---|---|---|---|
| Claimant Count - M/M | 20,200 | 27,900 | 23,700 | 300 | |
| Claimant Count Unemployment Rate | 4.7% | 4.7% | 4.6% | ||
| ILO Unemployment Rate | 4.1% | 4.0% | 4.1% | 4.1% to 4.2% | |
| Average Earnings - Y/Y | 3.8% | 3.8% | 4.0% | 4.1% | 3.7% to 4.0% |
Highlights
The new report suggest that the labour market as a whole was stronger than expected last quarter although wage growth is still slowing.
Claimant count unemployment showed a higher-than-expected monthly increase of 27,900 but only after a sharply smaller revised 300 advance in August. The rate was 4.7 percent, unchanged from the previous period's upwardly revise level.
The ILO unemployment rate decreased slightly to 4.0 percent compared to the prior and consensus of 4.1 percent, suggesting a slight improvement in the broader unemployment situation. On this definition, joblessness was down 75,000 at 1.386 million, its third successive drop. However, employment rose a very healthy 373,000. More up to date, payrolled employees decreased 15,166 on the month in September, their third drop in the last four months and third quarter vacancies were off 34,000 and at 841,000,their lowest level since March-May 2021.
Meanwhile, average earnings saw annual growth in the three months to August ease to 3.8 percent, below the prior revised estimate and the consensus, both 4.1 percent. That said, regular earnings weighed in at a still high 4.9 percent, albeit down from 5.1 percent last time.
In summary, today's update is again very mixed and should leave investors uncertain about the outcome of next month's BoE MPC meeting. Crucially, wage growth is slowing but underlying earnings remain dangerously high the context of a 2 percent inflation target. The UK's RPI now stands at 8 and the RPI-P at 5, meaning that economic activity in general is performing much as anticipated.
Claimant count unemployment showed a higher-than-expected monthly increase of 27,900 but only after a sharply smaller revised 300 advance in August. The rate was 4.7 percent, unchanged from the previous period's upwardly revise level.
The ILO unemployment rate decreased slightly to 4.0 percent compared to the prior and consensus of 4.1 percent, suggesting a slight improvement in the broader unemployment situation. On this definition, joblessness was down 75,000 at 1.386 million, its third successive drop. However, employment rose a very healthy 373,000. More up to date, payrolled employees decreased 15,166 on the month in September, their third drop in the last four months and third quarter vacancies were off 34,000 and at 841,000,their lowest level since March-May 2021.
Meanwhile, average earnings saw annual growth in the three months to August ease to 3.8 percent, below the prior revised estimate and the consensus, both 4.1 percent. That said, regular earnings weighed in at a still high 4.9 percent, albeit down from 5.1 percent last time.
In summary, today's update is again very mixed and should leave investors uncertain about the outcome of next month's BoE MPC meeting. Crucially, wage growth is slowing but underlying earnings remain dangerously high the context of a 2 percent inflation target. The UK's RPI now stands at 8 and the RPI-P at 5, meaning that economic activity in general is performing much as anticipated.
Market Consensus Before Announcement
The UK ILO unemployment rate is expected unchanged at 4.1 percent in the three months to August. Average earnings including bonus are expected up 3.8 percent on year, down from last time.
Definition
The Labour Market Report covers a number of key areas of the jobs market. Unemployment is updated on the basis of two separate surveys: the claimant count, which measures the number of people claiming unemployment-related benefits, and the more reliable but lagging International Labour Organization's (ILO) measure that excludes jobseekers that did any work during the month and covers those people who are both looking and are available for work. Average earnings growth, a key determinant of inflation, is also updated.
Description
The labour market survey gives the most comprehensive report on how many people are looking for jobs, how many have them and what they are getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.
