### Summary
Average wages in Britain rose at a rate of 7.8% annually between April and June, outpacing inflation of 6.8% in July. However, the long-term picture shows that workers are still no better off than they were four years ago, indicating the need for sustained pay rises to improve living standards.
### Facts
- 💰 Average wages in Britain rose at a rate of 7.8% annually between April and June.
- 📉 Inflation in July was 6.8%, lower than the previous month's figure of 7.9%.
- ⚠️ The long-term data shows that workers are no better off than they were four years ago.
- 🔒 The Bank of England is concerned about wage rises leading to inflation becoming entrenched in the economy.
- 📉 The UK's productivity levels have fallen behind its peers since the financial crisis.
### Additional Information
- The Bank of England and Chancellor discourage asking for higher wages, fearing a wage-price spiral.
- The current UK real average weekly earnings figure is the same as it was in May 2019 and December 2010, and no better than in March 2006.
- Sustained pay rises are needed for workers to improve their living standards.
New hires are experiencing declining wages in various sectors such as technology and transportation, which could impact job hopping and take time to reflect in federal data, posing challenges for the Federal Reserve in managing inflation.
U.S. job openings reach lowest level in nearly 2.5 years in July, signaling a slowdown in the labor market and potential impact on interest rates.
The trend of hefty pay increases for new hires is reversing, with the average posted pay for more job titles declining rather than increasing so far this year, according to data from ZipRecruiter, indicating a potential end to a brief golden age of wage growth for job seekers.
The US jobs data for July suggests a cooling employment market, with a drop in labor demand and easing of hiring conditions, which could help lower inflation without a significant rise in unemployment rates.
Job creation in the US slowed in August, indicating that the strong economy could be starting to weaken under pressure from higher interest rates. Private employers added 177,000 jobs, well below the previous month's total of 371,000. Pay growth also slowed, suggesting more sustainable growth as the effects of the pandemic recede. Investors and economists remain uncertain about the future of US inflation and whether the economy can continue to grow without a significant slowdown.
Job creation in the American labor market is expected to slow down in August, with the addition of approximately 170,000 jobs, reflecting a mild cooling of employment growth and wage growth, as well as the impact of higher interest rates on hiring; the recent strikes in the film industry, although not a significant direct employer, are likely to have some impact on the jobs numbers, particularly those related to on-set production and support roles.
British factories in August experienced their weakest month since the start of the COVID-19 crisis due to shrinking orders caused by rising interest rates, according to a survey, resulting in a decline in purchasing activity, inventory holdings, and staffing levels. However, the slowdown in domestic and export demand has alleviated inflation pressures, potentially leading to a decrease in goods price inflation. With the economy showing signs of a slowdown, the Bank of England is expected to raise rates for the 15th consecutive time, despite concerns that it may lead to a recession.
Wage growth in the UK has caught up with rising prices, resulting in real pay no longer falling, according to official figures, although the unemployment rate has risen and job vacancies have fallen. The data will also impact the state pension, which is set to increase by 8.5% next April.
The UK jobless rate rises to 4.3% as unemployment increases, but wage growth surpasses inflation, with total pay rising by 8.5% and regular pay growing by 7.8% in the May-July quarter.
The labor market is showing resilience, but the rate of hiring has significantly slowed down, possibly due to fewer temporary job opportunities and working hours.
Hiring by U.S. companies slowed more than expected in September, reflecting a cooling labor market due to higher interest rates, with the worst month for job creation since January 2021.
U.S. private employers added the fewest workers in more than 2-1/2 years in September, with large establishments shedding jobs, but that likely exaggerates the pace of slowdown in the labor market.
The rate of pay increases for job switchers in the US has slowed to 9%, the lowest rate since June 2021, with the difference between wage growth gained by leaving a job versus staying at its slimmest margin since October 2020, according to data from ADP.
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