Wednesday, July 17, 2013
Labour market improves and MPC unanimous
Posted by David Smith at 12:00 PM
Category: Thoughts and responses

Another generally good set of labour market statistics, with employment in the March-May period up by 16,000 to 29.71 million compared with December-February, and 336,000 up on a year earlier.

The unemployment rate fell by 0.2 percentage points to 7.8%, with the level, 2.51 million, down 57,000 on December-February and 72,000 on a year earlier. We should not, however, get carried away. Unemployment is stuck at around 2.5 million (and may rise next time when a low March figure drops out of the comparison), though the claimant count dropped by 21,200 in June to 1.48 million.

The worries are about long-term unemployment, which is rising, and depressed earnings growth. Total pay has been boosted by rising bonuses but is still only up by 1.7% on a year earlier, and thus below inflation (2.9%). More here.

The Bank of England's monetary policy committee, in its first meeting under Mark Carney, voted unanimously to keep policy on hold, the new governor thus avoiding being outvoted at his first meeting. This may not mean the end of quantitative easing, though it probably should. August's big announcements on forward guidance are keenly awaited. The minutes are here.