Ernst & Young: ITEM Club sees encouraging labour market figures

By Rob Starr, Content Manager, Big4.com

Nida Ali, economic advisor to the Ernst & Young ITEM Club, comments on recently released labour market figures saying they are very encouraging and points to the underlying strength in the labour market. However Ali also points out the consistent decline in unemployment may be difficult to sustain, given that recent activity indicators have been sluggish.

“These figures are very encouraging and point to underlying strength in the labour market. Not only has the headline unemployment rate fallen, but figures for full-time employment and vacancies are much improved as well. Today’s release further supports our view that upward revisions to the recent GDP data are on the cards.”

Ali also mentions wage growth is still very soft and below the inflation rate which implies that individuals’ real incomes are continuing to fall. However, even though  much of a pick-up in pay growth in the near future isn’t expected, the ongoing decline in the inflation rate should help to stabilise real incomes in the second half of the year.