UK wage growth rises; Trump blasts the Fed again - business live
Rolling economic and financial news, including new UK unemployment figures and the latest trade war action
- Latest: Trump says Fed clueless on rates
- Newsflash: UK jobs report beats forecasts
- Public sector boost as basic pay keeps rising
- Employment up by 32,000, unemployment drops
- Jobless rate still just 3.8%
3.33pm BST
Here's my colleague Richard Partington on the UK unemployment report:
Jobs growth in the British economy has cooled after months of employers appearing to shrug off Brexit concerns.
Employment in Britain increased by 32,000 to reach a record high of 32.75 million in the three months to April, according to the Office for National Statistics, fuelled by a rise in the numbers of self-employed people and women entering the workforce.
Commenting on today's labour market figures, Deputy Head of Labour Market Matt Hughes said https://t.co/M2pZEXYzN1 pic.twitter.com/C2krumDEwz
John Hawksworth, chief economist at PricewaterhouseCoopers, said: "The rate of increase in the latest three months was slower than in most previous quarters, which may be a sign that Brexit-related uncertainty is beginning to make companies more cautious about new hiring."
John Philpott of the Jobs Economist consultancy said the rise in employment masked a drop of 38,000 in the number of workers employed by a company, with self-employed people accounting for the entire net rise. "A closer look at the figures offers a slightly different story," he said.
But, some economists believe that businesses have continued to hire workers to meet demand rather than invest for the long term in productivity-boosting technology amid the uncertainty over Britain leaving the EU.
In a potential sign that the country's jobs boom could be running out of steam, the ONS said the number of job vacancies in Britain dropped to 837,000, falling from 861,000 at the start of the year.
Related: UK jobs growth slows amid Brexit uncertainty
3.33pm BST
Bad news! Carbon emissions from the global energy industry rose by the fastest rate in almost a decade last year.
The increase, which risks worsening climate change, was ironically driven by more volatile weather patterns. Surprise swings in global temperatures created more days that were either unusually hot (driving demand for air conditioning) or cold (boosting heating).
Carbon emissions climbed by 2% last year, faster than any year since 2011, because the demand for energy easily oustripped the rapid rollout of renewable energy.
Two-thirds of the world's energy demand increase was due to higher demand in China, India and the US which was in part due to stronger industry as well as the "weather effect".
Related: Energy industry's carbon emissions rise at fastest rate in nearly a decade
3.06pm BST
Back in parliament, Bank of England deputy governor Ben Broadbent also had his reappointment hearing today, following up on Michael Saunders' appearance in front of the Treasury select committee this morning.
Broadbent, who is one of the frontrunners to succeed governor Mark Carney next year, was tight lipped about whether he had applied for the job.
Related: Neil Woodford refuses to waive fees despite pressure from MPs and FCA
"The real financial stability risk in some ways will come from funds having to liquidate assets very quickly at values that are well below their market price, and that's precisely what suspensions are designed to prevent.
You cannot have a system where collectively could reduce all risk to zero. I don't think that's possible and I don't think that's desirable. There is risk in these funds, there is risk in risky assets."
2.56pm BST
Meanwhile in America, Donald Trump has launched a not-very-presidential attack on the US central bank.
Trump has claimed that the Federal Reserve 'don't have a clue', and should cut interest rates to help weaken the US dollar.
The United States has VERY LOW INFLATION, a beautiful thing!
This is because the Euro and other currencies are devalued against the dollar, putting the U.S. at a big disadvantage. The Fed Interest rate way too high, added to ridiculous quantitative tightening! They don't have a clue! https://t.co/0CpnUzJqB9
Maria, Dagan, Steve, Stuart V - When you are the big "piggy bank" that other countries have been ripping off for years (to a level that is not to be believed), Tariffs are a great negotiating tool, a great revenue producers and, most importantly, a powerful way to get......
...Companies to come to the U.S.A and to get companies that have left us for other lands to come back home. We stupidly lost 30% of our auto business to Mexico. If the Tariffs went on at the higher level, they would all come back, and pass. But very happy with the deal I made,...
....If Mexico produces (which I think they will). Biggest part of deal with Mexico has not yet been revealed! China is similar, except they devalue currency and subsidize companies to lessen effect of 25% Tariff. So far, little effect to consumer. Companies will relocate to U.S.
2.40pm BST
Some 18,000 jobs are in doubt today at Sir Philip Green's Arcadia empire.
Tomorrow Arcadia will ask its landlords to vote on a rescue plan that will cut rents and allow some stores to close. The vote was dramatically stopped at the last minute a week ago, after it became clear that Green didn't have enough support.
Related: Arcadia on the brink after Intu rejects revised CVA plan
1.55pm BST
Public sector pay rose faster than wages at private companies last month - for the first time in around five years!
Total average earnings across the public sector rose by 4.2% year-on-year in April alone, the ONS reports, outpacing the 3.7% growth in private sector pay during the month.
Total pay growth tapered off because smaller bonuses were paid in that month than a year ago, and there was reduced growth in private sector total pay, especially in the wholesaling, retailing, hotels and restaurants and the manufacturing sectors.
"A boost to wage growth in April came from the public sector where earnings picked up after a decade of pay restraint.
It offset some of the emerging weaknesses in the private sector where pay growth is stabilising as a result of Brexit and global uncertainties."
Stronger than expected #PublicSector #wage growth after a decade of restraint offsets some of the emerging weaknesses in the #PrivateSector - Our full analysis is out now - Read it here:https://t.co/MDCV64wFr8#NIESRwage
1.29pm BST
Fascinating difference in LR employment trends for men and women @ONS today reports female employment rate at all time high of 72%. Chart below shows how its risen from 52% 50 years ago, while men's employment rate has dropped from 92% to 80% over same time pic.twitter.com/PbbskZy8CT
1.26pm BST
Looking back at the unemployment report, it's clear that changes to the pension age mean more women are working longer.
The number of women in work jumped by 60,000 in the February-April quarter to a record high of 15.46m women.
"The number of workers aged 50 or older rose by a staggering 305,000 in the most recent jobs figures, representing the lion's share of the total 357,000 increase.
"In fact, the number of workers under age 24 dropped by 43,000 during the year while those aged 65 or older rose by 80,000.
12.09pm BST
Over in Parliament, MPs have been grilling Bank of England policymakers.
"A no-deal Brexit would probably have a significant adverse effect on the UK's long term growth prospects, because of reduced openness to international trade in both goods and services,and the resultant deterioration in the attractiveness of the UK as a global business location."
"In terms of monetary policy fire power... if it was right to loosen policy, we could cut interest rates close to zero - we wouldn't go to negative rates - but we still have the option of expanding QE further.
Now we've done substantial amount, but in theory we could expand it significantly further."
12.01pm BST
Economist Rupert Seggins has pulled together a neat thread on today's unemployment report:
1. Thread summarising some highlights from today's UK labour market stats. Headlines: unemployment at 3.8% (lowest since Dec-1974), employment at 76.1% (joint highest on record) & real pay (using CPI) 1.4%y/y ex. bonuses & 1.2%y/y total - the latter slipping from 1.4%y/y. pic.twitter.com/JohYzqK1ZL
2. Numbers of people not in work and not looking for work (termed: "inactive") down by 87k y/y. This is mainly down to fewer students (-65k), with some drop in numbers of retired people (-20k). pic.twitter.com/zreMNtjpTi
3. Latest stats showed employment growth slowing a bit in quarterly terms from 107k people q/q to 18k people. As @julianHjessop points out, there are some other potential signs of cooling in the UK labour market. https://t.co/pW5oPBinkp
4. This tweet from @AlpeshPaleja shows that the slowdown in employment growth appears to be largely down to the youngest age bracket. https://t.co/bABsDHV9K4
5. "The trend is your friend" - a point from @PawelAdrjan highlighting that we have seen employment grwoth slowdowns (and indeed some falls), which have not derailed the overall trend since 2012. https://t.co/Bm0xX5ALFa
6. With wage growth in cash tems picking up, there might be some increased "rate hike" talk at the Banks of England, as @samueltombs highlights. https://t.co/Gbgi0P5Qcg
7. But in real terms, your story on pay growth will crucially depend on which measure of price inflation you favour, as @notayesmansecon highlights here. https://t.co/zeRz3T597J
8. Also definitely worth checking out this article from @ONSRichardClegg which busts some popular myths about the UK labour market stats. https://t.co/wftAtl34Z7
11.50am BST
Mike Amesbury MP, Labour's shadow employment minister, is concerned that many of Britain's poorest-paid workers are still struggling to cope.
Here's his take on today's unemployment data:
"Behind these statistics, the simple truth is that many people are trapped in low paid, insecure work - and they are often left struggling to meet basic household costs.
"In-work poverty has increased faster than employment, and 70% of children growing up in poverty live in a family where someone is in work. That is totally unacceptable.
11.20am BST
The TUC is concerned that wages aren't rising faster -- and argue that the minimum wage should be increased further (on top of this year's rise).
General secretary Frances O'Grady said:
"Wage growth is still stuck in the slow lane. Real pay is still lower than it was before the 2008 crisis and this rate of growth won't restore decent living standards.
"We need to speed things up. The government must raise the minimum wage to 10 as quickly as possible and take action to strengthen the economy, including by embedding real pay rises across the whole of the public sector.
11.06am BST
In April alone, UK basic pay jumped by 3.8% per year.
That's a welcome boost for workers, meaning wages grew much faster than inflation (which was 2.1% in April)
Although the change affects a large number of people, their pay is by definition relatively low, meaning there may be little impact on the headline measure of average weekly earnings. But for the affected households and their employers the impact is potentially significant.
Employers now face the prospect of paying higher wages from their margins or cutting their headcount and critics of minimum wages worry that higher unemployment will result from an artificially high wage floor.
10.30am BST
Even though basic pay rose last month (to 3.4% per year), workers are still poor than before the 2008 financial crisis.
The Resolution Foundation have crunched the numbers, and shows that average pay is still a little below its peak 11 years ago (once you adjust for the rising cost of living).
Based on the current pace of wage growth, real wages will return to pre-crisis levels in early 2020 pic.twitter.com/1SXLvyjn0S
Real pay growth varies significantly by sector. Agricultural workers have experienced the sharpest real pay growth at 3.4%, while real wages are falling in arts, entertainment and recreation pic.twitter.com/cv9ANlBpqa
10.19am BST
Employment Minister Alok Sharma has welcomed today's unemployment report, saying:
"Once again we see more people in work than ever before; 3.7 million more since 2010. A testament to the Government's support for employers and jobseekers on a day where we also mark that 2 million claimants are now being supported through Universal Credit.
"With wage growth increasing pace on last month, outstripping inflation for the 15th month in a row, and record high female employment - the Government's focus on pro-business policies and balanced economic management is delivering opportunity for all."
Another very good set of #employment figures:
"aTMiMore people in #work than ever before
Joint highest ever employment rate
Record high rate of #female employment
#Wages growing faster than inflation for the 15th month in a row@conservatives delivering for #Britain !
10.15am BST
Economists are broadly in agreement that Britain's jobs market looks solid.
Here's the ONS's chief economist, Grant Fitzner:
The best thing about the strong UK labour market? The lowest #unemployment rate in 44 years #statistics #UK https://t.co/S4gxrwrOKh
Employment has also remains at a record high of 76.1%, unemployment 40 year low of 3.8%. Labour market shrugging off any Brexit uncertainty
#UK #labour market strength showing some signs of fraying: employment up reduced 33k in 3 months to April, lowest gain since last August although at new record of 32.746 million. Unemployment down 35k; jobless rate stable at 3.8%. Annual earnings growth 3.1% in 3 months to Apr
"The buoyant labour market is still going strong for the UK economy, even as it weathers widespread political uncertainty.
"Businesses' avid appetite for new hires has drawn many out of unemployment and inactivity into work, which has provided uplift to household incomes. With vacancies outpacing the number of people available to fill them, competition has pushed up wages in new positions, giving a boost to job switchers and starters.
10.08am BST
The number of vacancies in the UK economy has fallen - perhaps a sign that employment growth is weakening.
There were 837,000 unfilled positions in the three months to May - down from 861,000 at the start of this year.
10.03am BST
Here are the key points from the UK jobs report:
9.57am BST
Once you adjust for inflation, real basic wage growth was actually flat in the last quarter at 1.5%.
In a tightening labour market, it would be expected that labour shortages would put pressure on wages to increase. However, the uncertainty in the economy may be reducing the impact of such pressure.
9.43am BST
UK wage growth was also stronger than expected.
Average earnings, excluding bonuses, rose by 3.4% per annum in the February-April quarter. That's up from 3.3% last month.
In the private sector, total pay increased by 3.2% on the year to reach 531 in April. In the public sector, it grew by 3% on the year to reach 542 in April.
In April 2019, total pay growth tapered off because smaller bonuses were paid in that month than a year ago, and there was reduced growth in private sector total pay, especially in the wholesaling, retailing, hotels and restaurants and the manufacturing sectors.
9.38am BST
Breaking: Britain's economy has kept creating jobs, in the face of Brexit uncertainty and trade war jitters.
The Office for National Statistics reports that the number of people in employment in the UK increased by 32,000 to a record high of 32.75 million, in the three months to April.
For February to April 2019, 76.1% of people aged 16 to 64 were in paid work - the joint-highest employment rate on record https://t.co/C7Xme4NjP7 pic.twitter.com/G7uMRFyImK
.@ONS confirm that the unemployment rate remains low at 3.8% and has not been lower since the 1970s #StrongerEconomy pic.twitter.com/CFjJDtndRK
9.16am BST
Paul Donovan of UBS Wealth Management points out that @realDonaldTrump has been more vocal about the trade war with China recently.
However, Donovan also suspects Trump may resist imposing new tariffs as the re-election race hots up, telling clients:
8.58am BST
Shares in Ted Baker, the UK fashion chain, have slumped by a quarter this morning after it hit investors with another profits warning.
"Ongoing consumer uncertainty in a number of key markets and elevated levels of promotional activity across our global markets have resulted in extremely difficult trading conditions during the financial year to date.
Related: Ted Baker warns on profits amid 'extremely difficult' conditions
8.50am BST
Investors don't seem too worried about the threat of a recession.
European markets have opened higher, on the back of strong gains in Asia overnight. This has sent Britain's Footsie index to a new five-week high, clawing back May's losses.
Closing their ears to more Trump trade chatter, the markets continued their June jump, if with slightly less spring in their step.
Negotiation tactics? President trump threatens to raise tariffs on Chinese imports again if president Xi Jinping does not meet with him at G20 summit at month end
8.34am BST
Donald Trump taste for trade conflict could even extend to French wine.
"You know, France charges us a lot for the wine and yet we charge them little for French wine," Trump said.
The president claimed that winemakers in California complained to him that French wine can be imported at little cost, but that they have to pay high duties to export their products into France.
8.12am BST
Donald Trump's threat to impose tariffs on all Chinese goods is worrying US businesses.
Gary Shapiro from the Consumer Technology Association fears they could drive the US economy into a "Trump recession".
"They are taxes, they hurt consumers, they hurt American companies."
More China tariffs could push the US into a 'Trump recession,' CEO says https://t.co/YBEWU5UHHN
The U.S. added 75,000 workers to nonfarm payrolls in May for a total of 151.1 million jobs. Results for prior two months were revised lower by a net of 75,000 https://t.co/6H24rv4E6Y pic.twitter.com/cYP5cfsIcn
7.54am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
"The China deal is going to work out. You know why? Because of tariffs.
Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don't want to pay the tariffs."
President Trump saying he would expand the tariffs list against China (an estimated $300 billion more) if President Xi doesn't show up at the G20 meeting can be taken as a 'show up or else' diplomatic demand. China has not historically responded well to such ultimatums
Related: UK economy shrinks after Brexit car factory shutdowns
Having seen manufacturing activity fall sharply in April there is a concern that wage growth could start to go the same way as the economy slows.
Having come in at 3.3% for the last three months there is a sense we could start to slip back, with expectations of a softening to 3.1%, for the three months to April. The unemployment rate is expected to remain unchanged at 3.8%.
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