Tuesday saw a UK jobs report that masked much of the pain to come – you needed to dig beyond the headline figures to get a sense of what is actually going on.
At a glance, it was a decent morning for UK data. The claimant count change for August was a much lower than forecast 73.7k – against the 99.5k expected – with the average earnings index improving from -1.2% to -1.0% for the 3 months to the end of July. The unemployment rate did rise, but only from 3.9% to 4.1%, again for the 3 months to the end of July.
However slight that might look on a percentage increase, nearly 700,000 jobs have been lost since March. For the May to July period, meanwhile, 156,000 people were made redundant. That’s a 58,000 increase year-on-year, and a 48,000 rise quarter-on-quarter – the largest surge in redundancies by both metrics since 2009.
And, crucially, this is with the furlough scheme still in place. The monthly jobs reports are always a bit out of date by the time it arrives. Never will that be truer than in the coming months, as the data plays catch-up to what is going to be a truly upsetting end to the year for the UK jobs market.
Seemingly focusing on the surface-level headline numbers, neither the pound nor FTSE were too bothered by the jobs breakdown. The currency was up 0.1% against the dollar but down 0.2% against the euro, while the UK index added 0.2% to once again flirt with 6050.
Despite a decent string of figures out of China – including, crucially, a 0.5% rise in August retail sales, the first positive reading since December 2019 – the Eurozone was just as flaccid. The DAX dipped 0.3%, joined by the CAC with a 0.2% fall.
Closing a smidge below 28000, the Dow Jones is looking to add 75 or so points this afternoon. There’s nothing really on the agenda to stand in its way, bar something like on update on what Donald Trump thinks of the TikTok/Oracle deal.
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