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TheCountOfNowhere

Unemployment Rate Falls To 7.1% In Job Surge

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http://news.sky.com/...nt-in-job-surge

"The UK unemployment rate has fallen to 7.1%, according to newly released figures.It was the biggest ever quarterly increase in employment"

If we have recovered, where are the interest rate rises ?

Edited by TheCountOfNowhere

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The entire concept of "forward guidance" is about to bite the dust. The BoE will never raise rates before the election even if unemployment is 2%.

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The entire concept of "forward guidance" is about to bite the dust. The BoE will never raise rates before the election even if unemployment is 2%.

The BoE will never raise rates before the election until forced to.

I guess this job surge was Christmas based so might fall back, so we will probably get the "job losses increases rates wont increase" headline next week.

Or are a lot of immigrants throwing in the towel and going home maybe ?

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The BoE will never raise rates before the election until forced to.

I guess this job surge was Christmas based so might fall back, so we will probably get the "job losses increases rates wont increase" headline next week.

Or are a lot of immigrants throwing in the towel and going home maybe ?

http://www.telegraph.co.uk/finance/financetopics/davos/10588159/Davos-2014-business-news-and-markets-live.html

'Meanwhile, the minutes of the BoE's most recent Monetary Policy Committee meeting show that the MPC sees "no immediate need to raise rates" even if the 7pc threshold is reached.'

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The entire concept of "forward guidance" is about to bite the dust. The BoE will never raise rates before the election even if unemployment is 2%.

Forward guidance was merely the latest of Carney's serial blunders and screw ups.

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Forward guidance was merely the latest of Carney's serial blunders and screw ups.

I'd say it was no one of carney's tools to create a housing bubble....not that tool has been blunted he will cast it aside and use something else from his armoury...

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The BoE will never raise rates before the election until forced to.

I guess this job surge was Christmas based so might fall back, so we will probably get the "job losses increases rates wont increase" headline next week.

BBC using "unexpected"...

Some of this will certainly be a seasonal blip.

Carney will have to come up with some interesting words if it is been sitting around 6.6 -6.8% mid year with no sign of it getting worse.

"Still searching for the output gap" no doubt...

Edited by koala_bear

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BBC using "unexpected"...

Some of this will certainly be a seasonal blip.

Carney will have to come up with some interesting words if it is been sitting around 6.6 -6.8 mid year with no sign of it getting worse.

Luckily we face more European immigration at present so the chance of it dropping much more would be negligible...If it shoots back up to 8% Carney will be hailed as a visionary.

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Anybody able to unscramble the three month moving average and get the actual single month unemployment rate for November ? Just wondered if we were already below 7%. The individual monthly figures are volatile, so it might not be the case. However, given that the November stats are already two months out of date, I would be surprised if we were not substantially under 7% as we speak, given the recent trend.

I guess Carney loves lagging and smoothed data when you have a precipitous trend, because you are able to act on ZIRP too late. I think they should consider moving to a 12 month moving average and then that magic 7% can be further delayed.

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Anybody able to unscramble the three month moving average and get the actual single month unemployment rate for November ? Just wondered if we were already below 7%. The individual monthly figures are volatile, so it might not be the case. However, given that the November stats are already two months out of date, I would be surprised if we were not substantially under 7% as we speak, given the recent trend.

I guess Carney loves lagging and smoothed data when you have a precipitous trend, because you are able to act on ZIRP too late. I think they should consider moving to a 12 month moving average and then that magic 7% can be further delayed.

Please don't give him any ideas.

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Anybody able to unscramble the three month moving average and get the actual single month unemployment rate for November ? Just wondered if we were already below 7%. The individual monthly figures are volatile, so it might not be the case. However, given that the November stats are already two months out of date, I would be surprised if we were not substantially under 7% as we speak, given the recent trend.

I guess Carney loves lagging and smoothed data when you have a precipitous trend, because you are able to act on ZIRP too late. I think they should consider moving to a 12 month moving average and then that magic 7% can be further delayed.

Any good?

Chris Giles (@ChrisGiles_) tweeted at 9:31 am on Wed, Jan 22, 2014:

Lordy. Unemployment in UK falls even more expected. 7.1% http://t.co/gJ3Jndu84L

(

)

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Yep thanks 7YI........actually unemployment rose in November. Damn, no chance of rate rises then.

If you read the further tweets, its a feature of the series. You can only compare a monthly figure with the monthly figure 3 months ago, not month to month.

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Hugh Pym on the the BBC website

The noises from policymakers suggest they won't start thinking about a rate rise for some time after that 7% rate is reached. But they have some explaining to do about where their "forward guidance" policy has now got to.

http://www.bbc.co.uk/news/business-25841570

not just us that thing the BoE has some explaining to do...

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It would be better if they didn't set a target when they either don't stick to it or do what they say they will do when they reach it....one sure way to lose accountability, creditability and the trust of others.... ;)

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What is the big problem here ?

They said they would not consider raising rates until the rate dropped below 7%.

Now it has got close it doesn't mean that they have to raise rates, they never said that they would. All they said was that they would consider it.

They now have a further choice, now this condition has been reached they can either issue a new forward guidance metric, or say nothing. And therefore by omission indicate that they are considering raising rates.

My guess is the "forward guidance" will now become, "we see no immediate reason to raise rates".

Of course, they will always raise rates too slowly. Central banks always do.

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It would be better if they didn't set a target when they either don't stick to it or do what they say they will do when they reach it....one sure way to lose accountability, creditability and the trust of others.... ;)

Well it is better, because they didn't set a target.

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What is the big problem here ?

They said they would not consider raising rates until the rate dropped below 7%.

Now it has got close it doesn't mean that they have to raise rates, they never said that they would. All they said was that they would consider it.

They now have a further choice, now this condition has been reached they can either issue a new forward guidance metric, or say nothing. And therefore by omission indicate that they are considering raising rates.

My guess is the "forward guidance" will now become, "we see no immediate reason to raise rates".

Of course, they will always raise rates too slowly. Central banks always do.

It's a matter of perception. Forward guidance was intended to remove the uncertainties surrounding interest rate moves not compound them. Carney got it wrong (again). He made a premature call and has been rowing back from it ever since to the embarrassment of all concerned.

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It's a matter of perception. Forward guidance was intended to remove the uncertainties surrounding interest rate moves not compound them. Carney got it wrong (again). He made a premature call and has been rowing back from it ever since to the embarrassment of all concerned.

I agree that the policy has questionable value, and how much notice anyone took of it is highly questionable.

I didn't review the detail but I guess it had some weasel words in it like "barring any exceptional events".

That said, I don't think it has caused any issues re uncertainty and certainly doesn't affect credibility.

The policy itself is still active. The fact that we may soon enter a different regime may act as a brake on lending that means that they don't have to raise rates as quickly. We shall see.

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How many people fell out of the statistics altogether, yet are neither employed or now, unemployed. but on some scheme, course or other vehicle to remove people from the pool.?

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How many people fell out of the statistics altogether, yet are neither employed or now, unemployed. but on some scheme, course or other vehicle to remove people from the pool.?

Probably a lot. And the figure itself is open to engineering.

But in my mind if you wanted to choose a figure to target to manipulate then they chose a crap one. Because many of the government policies at the moment are primarily aimed at reducing unemployment, and I don't believe the government want an interest rate rise now before the election, irrespective of whether the economy needs it or not. My guess is that the BOE chose the stat by itself (probably just copied the US). But there are different drivers here and a different electoral cycle.

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