UK labour market: Investors left with a dog's dinner's second derivative - London Business News | Londonlovesbusiness.com
Briefly

The employment rate rose to 75.2% in the three months to May, while unemployment increased to 4.7%. Economic inactivity decreased to 21.0%. Annual earnings growth slowed to 5.0%, matching market expectations. Nicholas Hyett from Wealth Club noted the confusing trends in employment data. Both employment and unemployment rose simultaneously, indicating uncertainty in the data. PAYE data adjustments added 80,000 to April's employment figures, and future revisions for May could be substantial. This complex data set poses challenges for economic policymakers and market forecasts.
Bank of England rate setters were trying to give markets some clarity on the direction of interest rates when it said it would be focused on employment data when considering rate cuts.
Not only are the top line numbers moving in strange and unpredictable ways - with both employment and unemployment rising at the same time - but the underlying data is also incredibly uncertain.
The "more reliable" PAYE data has seen around 80,000 people added back to the employment rate for April, and the ONS have already warned the May data could be subject to a "larger than average revision."
The resulting dog's dinner of a data set could easily wrongfoot economic policymakers, which leaves markets making guesses about a dog's dinner's second derivative.
Read at London Business News | Londonlovesbusiness.com
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