17 October 2001, 12:16 UK Data Preview:Unemployment Set To Rise As Lab Mkt Eases
LONDON (MktNews) - The latest official labour market data are
expected to confirm that the long-awaited easing in the jobs market is
underway, analysts said Tuesday.
Claimant count unemployment is expected to rise 4,000, after a
decline of 6,000 in August, according to a Market News survey of
economists.
A rise in unemployment in September may herald the reverse of a
long running declining trend. The claimant count has fallen by an
average of 10,000 a month in the past three months and by an average of
11,000 since the start of the year.
Many analysts have been surprised by the continued strength of the
labour market given the slowdown in the economy.
For September, though, analysts cite some clear evidence to back up
their views that the data will show the labor market has turned this
month.
First, alternative measures to the claimant count have pointed to
an easing, rather than a tightening, in the labour market in recent
months.
The Labour Force Survey, also published by the National Statistics
office, showed the employment rate among those of working age was 74.6%
in May to July, down 0.2 percentage points on the previous three months.
Moreover, the International Labour Organisation's measure (the
international standard measure for joblessness) showed unemployment
rising by 13,000 in the three months to July compared with the previous
three months.
"To our minds this marks the turn in the labour market and the
beginning of a gentle rise in unemployment, which we expect will see the
claimant count measure follow suit by 5,000 this month," said David
Page, economist at Investec.
Private-sector survey evidence has also shown demand for employees
slackening. A survey by NTC Research, for example, revealed that
permanent work placements by UK recruitment consultants fell in
September at their fastest rate since 1997.
Also the events of September 11 have led to well publicised job
losses in the airline sector, which may start to feed through to the
data as early as this month.
The labour market report is also expected to show average earnings
growth easing slightly. A Market News survey revealed that the median
forecast was for the headline rate of earnings growth -- a measure
based on the three months to August compared with the same period a
year earlier -- to fall to 4.5% from 4.6% in July.
If, as expected, joblessness begins to pick up and earnings growth
moderates, then the Bank of England Monetary Policy Committee's
long-held fears over the inflationary effects of the tight labour market
will begin to diminish.
"I think the labour market is going to stop being an issue of
concern," Michael Hume, economist at Lehman Brothers, said.
LONDON (MktNews) - The latest official labour market da
xpected to confirm that the long-awaited easing in the jobs
nderway, analysts said Tuesday.
Claimant count unemployment is expected to rise 4,000,
ecline of 6,000 in August, according to a Market News surve
conomists.
A rise in unemployment in September may herald the reve
ong running declining trend. The claimant count has fallen
verage of 10,000 a month in the past three months and by an
1,000 since the start of the year.
Many analysts have been surprised by the continued stre
abour market given the slowdown in the economy.
For September, though, analysts cite some clear evidenc
heir views that the data will show the labor market has tur
onth.
First, alternative measures to the claimant count have
n easing, rather than a tightening, in the labour market in
onths.
The Labour Force Survey, also published by the National
ffice, showed the employment rate among those of working ag
n May to July, down 0.2 percentage points on the previous t
Moreover, the International Labour Organisation's measu
nternational standard measure for joblessness) showed unemp
ising by 13,000 in the three months to July compared with t
hree months.
"To our minds this marks the turn in the labour market
eginning of a gentle rise in unemployment, which we expect
laimant count measure follow suit by 5,000 this month," sai
age, economist at Investec.
Private-sector survey evidence has also shown demand fo
lackening. A survey by NTC Research, for example, revealed
ermanent work placements by UK recruitment consultants fell
eptember at their fastest rate since 1997.
Also the events of September 11 have led to well public
osses in the airline sector, which may start to feed throug
ata as early as this month.
The labour market report is also expected to show avera
rowth easing slightly. A Market News survey revealed that t
orecast was for the headline rate of earnings growth -- a m
ased on the three months to August compared with the same p
ear earlier -- to fall to 4.5% from 4.6% in July.
If, as expected, joblessness begins to pick up and earn
oderates, then the Bank of England Monetary Policy Committe
ong-held fears over the inflationary effects of the tight l
ill begin to diminish.
"I think the labour market is going to stop being an is
oncern," Michael Hume, economist at Lehman Brothers, said.
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