EEF blog

Insights into UK manufacturing

Labour Market Figures are good news for the MPC

Felicity Burch May 19, 2011 16:34

Yesterday’s labour market statistics released by the ONS will have provided some comfort for the members of the Monetary Policy Committee. Not only were employment figures relatively healthy – indicating that the underlying economic situation could have been stronger in the past few months than GDP data suggests – but growth in average weekly earnings also remained at a low-enough level to stave of fears of a price/wage spiral.

Average weekly earnings growth is some way below the pre-recession average of a little over 4%. Across the whole economy average earnings growth was 2.3% in the three months to March. This was slightly higher than in February, but this can be attributed to increased bonuses in Finance and Business services: when bonuses are excluded, average pay growth actually fell from 2.2% to 2.1% between February and March.

Figure 1: Average weekly earnings growth

On the flipside, the number of hours worked in the economy as a whole fell slightly, over the quarter, despite the numbers of full-time employees rising, and a fall in the number of part-time employees. It could be, then, that pay awards are rising a little more quickly than the headline figures suggest. But, even then, earnings growth is some way from its average levels, and it remains well below CPI.

Tags:

Disclaimer
This is an informal blog about manufacturing and the economy written by EEF's policy and representation staff. While it is written from an EEF perspective, contributions should not be taken as formal statements of EEF policy, unless stated otherwise. Nor does it cover all the issues on which we campaign - you can check these out in more detail at our main site.

We welcome and encourage comments, but we reserve the right to remove any that are offensive or irrelevant. We are not responsible for the content of external internet sites.

About EEF

EEF helps manufacturing businesses evolve and compete.  We provide business services that make them more efficient and management intelligence that helps them plan.  Our work with government encourages policies that make it easy for them to operate, innovate and grow.

Find out more at www.eef.org.uk