3 Numbers: UK labour market strengthens; EU industrial, US jobs
- 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
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.
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 Econoday.com’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 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.
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.
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.
– Edited by Gayle Bryant