NIESR Wage Tracker – November 2019

Uncertainty Taking Toll on Labour Market

Main points

• According to new ONS statistics published this morning, UK average weekly earnings (AWE) expanded by 3.6 per cent (excluding and including bonuses) in the three months to September compared to the year before (figure 1).
• With CPI inflation at 1.8 per cent in the three months to September, real wages grew at an annual rate of 1.8 per cent over the same period.
• Earnings growth was slower in September than at its recent peak in the three months to June and softer than the estimate we published in our Wage Tracker last month. In particular private sector earnings data was weaker than forecast, partly as a result of downward revisions to past data.
• The Wage Tracker indicates that regular earnings growth will remain just above 3½ per cent in the fourth quarter of 2019.
• Based on NIESR Wage Tracker and GDP Tracker information, we estimate unit labour cost growth of around 3-3½ per cent per annum in the fourth quarter, which is somewhat softer than in previous quarters.

Dr Arno Hantzsche
Principal Economist in Macroeconomic Modelling and Forecasting