--UK Dec headline avg earnings up annual 4.4%
--UK adj Jan claimant count unemployment dn 25,500 from Dec
--UK Dec headline avg earnings well above market forecasts
--UK Dec unadj earnings ex bonus 4.7 pct pts, bonus 0.3 pct pts
--UK Oct-Dec ILO unemployment 5.3%, down vs Jul-Sep 5.4%
--UK Oct-Dec ILO unemployment down 21,000 on Jul-Sep
--UK Oct-Dec manufacturing unit labor costs down 0.2% on year
--UK Dec single month avg earnings up provisional 4.8% on year
--UK Jan claimant count unemployment rate 3.5% vs Dec 3.5%
--UK Dec private sector headline avg earnings up 4.5% on yr
--UK Dec public sector headline avg earnings up 3.9% on yr
--UK Oct-Dec Labor Force Survey employment rate 74.6%
--UK Oct-Dec Labor Force Survey employment down 5,000 on qtr
--Bonuses add to UK earnings for first time since April
--Rise in UK Dec earnings mainly on finance sector bonuses
--UK Dec earnings also up on public sector bonuses, arrears
--UK Jan claimant count fall biggest since July 1999
--UK claimant count jobless level lowest since Dec 1975

By BridgeNews
London--Feb. 14--U.K. headline average earnings growth accelerated much more sharply than expected in December, propelled by big bonuses in the financial services sector and public sector pay arrears, according to figures published Wednesday by the Office for National Statistics. Annual growth rose to 4.4% in the three months to the end of December from 4.2% in November and was well above forecasts of 4.1%. There were further signs that the labor market is still tightening in the claimant count measure of unemployment. It fell 25,500 in January, the biggest fall since July 1999, and is now at its lowest level since 1975.
* * * Single month December average earnings rose a seasonally adjusted 4.8% on the year, the largest rise since March. The big jump in the single month rate means another increase in the headline rate is likely in January, when the weak 4.1% contribution in October falls out of the three-month average.
The unadjusted measures of earnings growth in December jumped even more sharply to 5.0% in December from 4.1% in November. Bonuses added 0.3 percentage points of the increase, making their first positive contribution since April.
Bonuses have been cutting the overall earnings growth rate until now because they were not as large as bonuses paid in the previous year. The biggest bonuses are paid in the financial services sector, like investment banks in the city of London, and are usually concentrated in December and the first few months of the year.
Headline private sector earnings as a whole picked up to 4.5% in December from 4.4% in November. Public sector average earnings also rose, measuring 3.9% from 3.5% in November. The Office for National Statistics said public sector earnings were boosted by bonuses in the post and communications sector and pay arrears.
The sharp fall in claimant count unemployment follows a gradual slowing in recent months, and the measure is once again on target to break beneath the symbolically-important one million level for the first time in more than 25 years.
The fall in the ILO measure of unemployment, which is generally considered a more reliable reflection of underlying developments in the labor market, was less pronounced. It dropped 21,000 in the three months to the end of December to 1,564,000. The ONS only considers falls of more or less than 54,000 to be statistically significant.
LFS employment fell by 5,000 over the same period, suggesting the labor market may not be tightening as dramatically as the other indicators have implied. The ONS said it thinks employment growth has leveled off. The figures are bound to cause the Bank of England some concern. It has been worried about inflationary pressure emanating from the labor market for some time.
Mark Miller, economist at Morgan Stanley
"Given the strong increase in pay seen a year ago it is surprising that the latest numbers have ticked up on in way they have. It would take some steam out of the market in terms of expecting a March rate cut. However in the January data there is still some bias towards a lower pay growth number because of a large base effect dropping out. Still, the overall pace of tightening in the labor market is easing but these data suggest it is doing so very gently."
Brian Hilliard, Economist at Societe Generale
"It's great news for the economy as whole but rather puzzling for the Bank of England...It is surprising to see such a large acceleration in earnings growth in one month...Set against yesterday's inflation data, the data makes it less of a done deal that rates can be cut again quickly." End
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