Latest data released by ONS - 14 August 2018
- Prior +2.5%
- Earnings ex-bonus +2.7% vs +2.7% expected
- Prior +2.7%; revised to 2.8%
- ILO unemployment rate 4.0% vs 4.2% expected
- Prior 4.2%
- Employment change 42k vs 93k expected
- Prior 137k
- July jobless claims change 6.2k vs 7.8k prior; revised to 9.0k
- July claimant count rate 2.5% vs 2.5% prior
Headline reading dips but core reading meets expectations with a positive revision to boost. Also, the unemployment rate falls to 4.0% so that adds some gloss to the report - it's the lowest unemployment rate since 1975.
Looking at the details, Q2 output-per-hour productivity came in at +1.5% y/y from the +0.9% y/y figure in Q1 - the biggest annual increase since Q4 2016. So, that's also a positive. But the wages overall remain soggy as the headline reading is the weakest since September 2017 and the core reading is the weakest since January since the prior was revised higher.
I'd still look to sell into any rallies at this point. Apart from the increased productivity and unemployment rate, it's not changing much as wages remain rather soft and that means households are still going to feel the pinch.
