More strong employment figures


Figures covering the Sep-Nov 2019 quarter eg the new academic year.

The trend for rising employment to new record levels continues, 32.9 Million people or 76.3%. Kids in college rather than on the dole. Official unemployment down to 3.8%. Fewer people aged 16-65 economically inactive. Vacancy levels holding up at around 800,000. Significantly more women in full time employment, mostly due to rise in the state retirement age. Wages still rising 3.2% versus inflation at 1.5%.

At the same time we have sustained low interest rates (mortgage rates) not seen for a couple of generations. Disposable cash must be up, and little incentive to save vs invest (spend) unless you are buffering before a major purchase … pressure building for a kick up to housing market perhaps?

I would think the rapid progress in minimum wage is also encouraging participation in work.

Not sure how this is showing through in productivity, but I do know we are still adding to full time employment numbers at twice the rate the pre-Javid Treasury based its central forecasts on. Despite Brexit and blah blah blah we have more money to spend in public services. Without raising taxes.

So this is good for the government books.

Who else is winning from this, which market sectors and companies? By all accounts we are not spending it on the High Street or on new cars and house prices have been flat, so where … online shopping for fitbits, on takeaways, in the pub, on holiday, on “experiences” … or are we borrowing less on credit cards and paying off the mortgage and putting it into our pensions?

Who is winning from all this?


In part answer to my own question maybe this from the CBI is a clue …

"Optimism among manufacturers rose at the fastest pace ever recorded by the Confederation of British Industry in the last quarter. … but … while optimism in the manufacturing sector has picked up, total new orders dropped over 20 per cent in the previous quarter, while all bar five of the 17 sub-sectors saw output fall.

The decline in new domestic-based orders was the steepest since the financial crisis, the CBI said in an overview of its survey.

There was a ‘sharp’ drop in the number of cars being manufactured over the period, but the picture was better for the mechanical engineering and food, drink and tobacco"

And, is not more and more of our disposable income going on digital services … mobile and internet communications, streaming, gaming, gambling. The tech giants have a lot more good news to come then.

I like the idea of the UK engineering sector having a boom to look forward to though, not just metal bashers but high value systems engineering, AI, new technologies being developed and exploited.


And a positive PMI report this morning, via Reuters …

"The ‘flash’ early readings of the IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) showed Britain’s vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased.

Britain’s performance bettered the euro zone’s for the first time since December 2018, as the PMI suggested the world’s fifth-largest economy looked on track to grow around 0.2% in quarterly terms after it slowed to a crawl late last year.

The reading for British factories was also better than expected, rising to 49.8 from 47.5, the highest level since April.

While the PMI signalled the ninth month of contraction for manufacturing, which accounts for 10% of economic output, new orders increased for the first time since April.

The uplift in sentiment about the outlook hints at even better growth to come"