Economic growth steady but subdued while labour market growth softens

Q3 GDP growth rate was unrevised in their final estimate at 0.4%. However, revisions towards composition of growth left it looking more balanced covering the quarter. Employment continued to fall inside the with three months to October, however the labour market remains relatively tight.

The ONS’s final estimate of Q3 GDP growth was unrevised at 0.4%, continuing the interest rate of steady but subdued momentum seen considering that the begin 2017. However, the ONS’ revisions towards the composition of growth left it looking more balanced over the quarter, together with the breakdown showing a stronger contribution from business investment and exports.

However, while development in household spending picked up, new data stated its foundations remained shaky, with real incomes still under pressure and consumers financing spending by running down their savings.

The CBI’s distributive trades survey gave the impression to suggest some additional strength in consumer spending in December, with retail sales rising for your second month running on the year ago from the run up to Christmas. However, retail sales and orders both disappointed expectations of somewhat stronger growth.

In several months to October, employment fell by 56,000 to 32 million based on labour market data from your ONS. Although this marks the next consecutive rolling quarter of falling employment, the result is a lengthy run of strong growth. Furthermore, the labour market remains relative tight, using the unemployment rate unchanged at 4.3%, the minimum since 1975. But while wage growth (excluding bonuses) rose by 2.3% over the year from the with three months to October, it continued to jog well below CPI inflation, which means real wages continued to fall, further underlying the cruel conditions facing households.


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