It’s a quieter week for manufacturing-related data releases, but attention will be focused on the outcome of the Fed meeting on Thursday.
UK Inflation data is released on Tuesday. CPI has been bobbing around the zero mark since the turn of the year and came in 0.1% in July. Core inflation – exc. food and energy – picked up slightly to 1.2% in last month’s release.
Further falls in the oil price over the month combined with downward pressure on the price of imports should result in little or no movement in CPI in August. Indeed, a return to the 2% target for CPI still seems some way off.
On Wednesday, the UK labour market update is published. There was little change to report last month, with the unemployment rate holding steady at 5.6% and the Claimant Count measure recording a small fall of 4900 in July. Earnings growth also remained reasonably firm across the economy with average weekly earnings exc. bonuses up 2.8% in the three months to June.
The consensus expectation is for more of the same in this month’s release, with the unemployment rate remaining at 5.6% and earnings growth edging towards the 3% mark.
Also in this release is a quarterly update on manufacturing employment. The sector added 34,000 jobs in the three months to March – the ninth consecutive quarter of expansion. EEF survey data covering more recent quarters continue to report a balance of companies increasing headcount, but the pace of increase looks set to slow. We should expect to see another quarter of manufacturing job growth, but this run is likely to come to an end at some point this year.
The ONS estimates for international productivity growth will be out on Friday. The UK’s relatively poor performance on productivity growth is likely to be confirmed, but the data will likely reignite the debate on measurement of productivity – if not any further discussion on what more could and should be done about the gap with our competitors.
And finally, probably the most significant event of the week is the Federal Reserve meeting on Thursday. US indicators over the year indicate point to an economy in good shape and arguably ready for a normalisation of monetary policy, however, financial market volatility and global downside risks have increased. This week was looking like a racing certainty for the Fed’s first rate hike, but lately the communications have become less concrete with market watchers split on Thursday’s decision.
This week we’ll be blogging on inflation and productivity. We’ll also be celebrating the start of the Rugby World Cup with the fun economic and trade related facts on the competitors.