Over in Germany, economic confidence has bounced back from its recent slump – an encouraging signal.
The ZEW Institute’s sentiment index has come in at -1, up from – 23 .5 in October. Although still in negative territory, it suggests investors are less gloomy.
ZEW reckons that the prospect of a Brexit deal and a breakthrough in the US-China rade war have boosted German investor sentiment.
ZEWpresident Achim Wambach said:
“Hope is growing that the political and economic environment will improve in the near future.”
Simon French, chief executive ofPanmure Gordon, has a balanced take on today’s jobs report:
The drop in part-time workers has hit women workers harder than men (as they are more likely to be working part- time, jugging work and family commitments).
The ONS says:
The number of part-time workers fell by 164, 000 to 8. 54 million in Quarter 3 2019, while the number of full-time workers increased by 106, 000 to 24. 21 million.
The decline in part-time workers was driven by women (down 106, (in the quarter) and the increase in full-time employment by men (up by 93, 000 in the quarter).
ING: Young people and part-time workers hit
Young people and part time workers are bearing the brunt of the UK jobs slowdown, as these charts from ING show:
James Smith,ING’s Developed Markets Economist, says:
The recent fall in employment has been predominantly driven by 18 – 24 year-olds, and once that group is stripped out, jobs growth is still positive. A large chunk of the fall has also been led by part-time employees. It’s not clear whether these two factors are linked, but both can be reasonably volatile parts of the jobs data.
But with forward-looking hiring indicators deteriorating, and given the risk that Brexit uncertainty persists into 2020, there’s a clear risk the jobs market deteriorates further over coming months. ”
Geraint Johnes,Professor of Economics atLancaster University Management School,has spotted that the number of part-time workers has fallen very sharply over the summer.
More than 100, 000 more workers were employed full-ti me over the latest three-month period than in the previous quarter. This increase is roughly evenly split between employees and self-employed workers. Set against this good news, however, is a very large decline in numbers of part-time workers – a fall of 160, 000 in total.
Overall, therefore, the number of people in employment has fallen. This is accompanied by a rise in the numbers of people who are economically inactive – especially amongst 18 – 24 year olds. Meanwhile, unemployment has fallen by some 23, 000 and the unemployment rate is back down to 3.8%.
IoD: Jobs market is under strain
Britain’s bosses are worried that the UK jobs market is under strain
Tej Parikh,chief economist at theInstitute of Directors, says some firms are putting projects on hold due to political and economic uncertainty (thanks to Brexit and the general election).
Others are struggling to find qualified staff, he says.
“With so many in work there has been a lift to household incomes, which has supported the economy through a challenging period. However, businesses are now finding it harder to access the talent needed to fill openings, so jobs growth is expected to slow further.
Many firms are also putting recruitment plans on ice as wider projects and investments are bottled up by uncertainty. Vacancies are likely to continue falling.
The IoD also argues that wages will come under pressure:
“The pick-up in wage growth earlier this year has been a plus, but there is clearly a limit to how high pay packets can go. With many firms facing elevated costs and difficulties raising their productivity game, the margins to raise pay are eroding. A further acceleration in wages now looks unlikely.
TUC General SecretaryFrances O’Gradyis disappointed that wage growth has slowed in the last quarter.
Although wages ( 3.6%) are rising faster than inflation ( 1.7%), this doesn’t make up for falling real wages in recent years (see figure 4, here).
“Working families are thousands of pounds out of pocket after a decade of dismal pay growth. That is not right.
“The Conservatives have presided over the longest wage squeeze since Napoleonic times. They have nothing to boast about.
The TUC has calculated that the median employee is £ 14, 278 worse off today than they would be had wages kept pace with inflation since 2008. In the same period, unsecured household debt has risen by a third to a record high of £ 14, 177.
Here’s the Office for National Statistics’s take on today’s data:
“The employment rate is higher than a year ago, though broadly unchanged in recent months.
“Vacancies have seen their biggest annual fall since late 2009, but remain high by historical standards.
The number of EU nationals in work was very little changed on the year, with almost all the growth in overseas workers coming from non-EU nationals. ”
UK unemployment: the key charts
Britain’s employment rate has dropped to 76% , from 76. 1%, in the last quarter as the number of people in work fell by 58, 000.
That’s still close to a record high, following a steady recovery since the financial crisis
But at 3.8%, the unemployment rate has dropped back to its lowest since the mid – 1970 s.
That’s because more people have become economically inactive – neither working nor looking for a job.
Wage growth has also reversed its recent gains, with average basic pay rising by 3.6%, down from 3.8% a month ago.
That means real earnings, adjusted for inflation, are also rising at a slower rate.
This should also set alarm bells ringing:
Biggest fall in vacancies since 2009
More bad news.The number of vacancies in the UK economy has fallen by 14, 000 in the last quarter.
That’s the biggest quarterly decline since 2009, according to the ONS.
There are now 800, 000 jobs waiting to be filled, down from 814, 000 a month ago.
This further suggests the jobs market is cooling.
Vacancies hit a record high of 861, 000 at the start of this year, but have been falling since.
Updated (at 4.) am EST