Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 12 August 2015 at 5:00 GMT

3 Numbers: UK labour market strengthens; EU industrial, US jobs

editor/analyst /
United States
  • UK’s claimant count expected to resume downward trend in today’s July update
  • Eurozone industrial production on track to remain modestly positive 
  • US job openings may ease in today's release, but the trend remains healthy

By James Picerno

Wednesday’s a busy day for economic reports, including the monthly update on the UK’s labour market. We’ll also see the official release for Eurozone industrial output for June, followed by the US government’s estimate of job openings at this year's halfway mark. 

 Back at work ... July's UK claimant count is expected to fall 2,500 compared with last month. Photo: iStock 

UK: Labour Market Report (08:30 GMT) Has Britain’s economic recovery peaked? That’s a fair question in light of the mild but otherwise conspicuous reversal in the claimant count trend in last month’s update for June. 

For the first time in nearly three years, the number of workers claiming unemployment benefits increased versus the previous month. One month a trend does not make, of course. Nonetheless, the U-turn marks a change in the trend and suggests that the tide could be turning.

A key question for today’s data: Was June’s increase in the claimant count just a one-off blip? That’s the prevailing wisdom, based on’s consensus forecast. Economists are anticipating a return to form in today’s update; the number of claimants in July is projected to fall 2,500 versus the previous month. 

That’s a modest retreat by the standards of recent history. But at this point, a decline of any degree will boost confidence that the UK’s labour-market expansion still has room to run.

That’s the message in the latest economic estimate from the London-based National Institute of Economic and Social Research (NIESR). Last week the group said that the quarterly rate of GDP growth for the UK through August was a solid 0.7% – unchanged from the previous month’s estimate and the highest since January. 

Using that data as a guide, it would be surprising if today’s release on the claimant count turns out to be a disappointment.

Eurozone Industrial Production (09:00 GMT) Today’s June update on industrial activity will look a bit wobbly in terms of the monthly comparison, but the year-on-year trend is still on track for modest growth.’s consensus forecast sees output rising 1.7% through this year’s midpoint versus the year-ago level – slightly above May’s 1.6% rise.

That’s still a sluggish pace, but the mild expansion in the industrial sector appears to be in no danger of evaporating. Sentiment data for the manufacturing sector supports that view. Markit Economics reported last week that the flash estimate for its purchasing managers’ index for July reflected manufacturing activity that “continued to expand at a solid, steady pace at the start of the third quarter".

Today’s hard data on industrial production is one month behind the latest PMI release, but Markit's slow-growth readings for manufacturing have remained fairly constant since March, ticking up slightly in the past two months. That’s a strong clue for thinking that today’s output data will continue to show that the annual growth rate will hold steady in the 1%–2% range.

Unimpressive? Yes, but encouraging nonetheless when you consider what could have happened when the Greek crisis threatened a wide-scale meltdown of the currency union in June and early July. By that standard, today’s numbers will look pretty good.

US: Job Openings & Labor Turnover Survey (14:00 GMT) The US labour market’s growth rate has slowed lately, but only moderately so. The 215,000 increase in nonfarm payrolls in July was the second month of deceleration. Yet the number of new workers still advanced above the 200,000 mark for the third month in a row – a level that’s reportedly strong enough to keep the jobless rate falling – and the economy humming.

The monthly numbers on job openings continue to offer support for expecting that a robust degree of forward momentum is still bubbling in the labour market. Indeed, the government’s last update for May reflected job openings ticking up to another record high: 5.363 million (seasonally adjusted). “Job openings [in May] rose over the year for many industries,” the Bureau of Labor Statistics advised last month.

After two straight months of record highs, it wouldn’t be surprising to see today’s number pull back in the June profile. Would that be a cause for worry? Not necessarily. Several private sources hint at an ongoing expansion for the labour market. For instance, US job listings expanded at a healthy pace in June and July, according to SimplyHired, a web-based job search engine. “The US labor market continues a strong 2015 with four-percent growth [in July],” the company reported last week.

That doesn’t mean that today’s numbers on job openings will reach yet another record high, but it’s a clue for expecting that the labour market’s momentum will remain positive in the near-term future.

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– Edited by Gayle Bryant

James Picerno is a macro analyst/editor at Follow James or or post your comment below to engage with Saxo Bank's social trading platform.


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