News on manufacturing jobs
The labour market report out Tuesday will include the update of workforce jobs in manufacturing for March. The most recent data for December saw manufacturing jobs gain ground after falling in the previous two periods. Our Manufacturing Outlook survey showed that the employment balance was flat in 2016q1, suggesting manufacturing jobs would have struggled to rise again in March. Fortunately, our survey for 2016q2 was more encouraging as the employment balance climbed back into positive territory.
Also, the report will show whether the unemployment rate remained at a decade-low of 5.1% for the sixth consecutive quarter in the three months to April. The recent slowdown in job growth suggests that the unemployment rate is either at or near its trough for this economic cycle. In addition, the report will provide an update on the wages front. Recent developments in wage growth have been a bit puzzling: despite the tight labour market, annual wage growth has been on a weakening trend since the middle of 2015.
BoE likely to sit tight
Once again, the BoE is likely to keep its key policy rate at 0.5% and asset purchase program at £375 billion on Thursday. The consumer price index for May out earlier in the week will probably show that the annual inflation rate rose but remained low.
We think the BoE is unlikely to want to rock the boat ahead of the referendum on EU membership. The minutes of the policymakers’ meeting will probably reiterate the main points from last month’s Inflation Report rather than add anything new into the mix.
This week we’ll be blogging about the manufacturing employment and workforce jobs data, and take a closer look at food and drink sector.