UK job growth will have remained superficially solid in Q2 - RBS

Research Team at RBS, suggests that the UK’s deteriorating post referendum outlook means that the market’s data focus will shift from trying to detect nascent price pressures towards signs of deteriorating activity.

Key Quotes

“The lagging nature of employment and the rolling 3month averages for the headline data mean job growth will have remained superficially solid in Q2. Still, a few cracks are already visible with average working time falling and outsized gains in self-employment (probably indicative of underemployment).

We forecast a sizeable, 155k, rise in employment in the three months to June, lowering unemployment by 70k and leaving the unemployment rate at 4.9%, close to cyclical lows. The lagging nature of these data means that a rise in unemployment will probably not materialise until the tail end of the year. However, there are already some signs of deterioration including a fall in average working time and a near stagnation in fulltime employee jobs (total employment has been fuelled by outsized increases in self-employment and part-time employment). Wage inflation is forecast to be little altered at 2.3% 3m y/y.”