Labour market figures are at odds with an economy that is allegedly in recession, says ITEM Club
Nida Ali, economic advisor to the EY ITEM Club, comments on today’s labour market figures:
- Labour market figures are completely at odds with an economy that is allegedly in recession
- However wage growth remains sluggish and continues to squeeze UK consumers
- The Eurozone crisis is a significant downside risk to growth and the labour market
“Today’s labour market figures are filled with good news and are much better than what we had expected. The significant increase in employment and decline in unemployment in the Q1 ILO data is completely at odds with an economy that is allegedly in recession.
“The figures also point to some underlying strength in the UK economy and support our view that an upward revision to Q1 GDP is on the cards. A sharp fall in the claimant count in April, coupled with a downward revision for March, is also very encouraging
“On the downside, consumers continue to be squeezed by sluggish wage growth, which is lagging at less than half the inflation rate. The Eurozone crisis also remains a significant downside risk to growth and, consequently, the labour market.”