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<\/p>\nCHART OF THE WEEK<\/b><\/p>\n
The jump in the unemployment rate from 3.8% to 4.0% in June is down to the month\u2019s 0.2% rise in the labour force participation rate. At 62.9%, it is nearing the 63.0% ceiling that has been in place for the past five years. Given the ageing population, it is unlikely that it will rise further.<\/p>\n
New job creations remain close to 200,000 per month, a pace that should continue to lower the unemployment rate significantly. Ample anecdotal evidence supports the extremely tight labour market hypothesis, including a shortage in truck drivers and a rise in the number of ex-offenders being hired. However, for the moment there has been no marked acceleration in wages.<\/p>\n
As the graph below shows, companies have never made fewer workers redundant than currently, yet employees are resigning faster than at any time since 2001.<\/p>\n
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OUR ANALYSIS<\/b><\/p>\n
While the resignation rate had been stable below 2.2%, a level that prevailed between 2005 and 2007, it has risen sharply in the last three months, indicating that an increasing number of employed are leaving their jobs.<\/p>\n
Atlanta Fed data, which is calculated from detailed source data, shows the year-on-year rise in median hourly wages for job switchers was 4.0% whilst that for job holders was 2.7%. Direct substitution effects aside, the rise in the number of resignations is likely to put relatively more pressure on wages than the falling unemployment rate alone.<\/p>\n
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The opinion expressed above is dated 13 July 2018 and is liable to change.<\/em><\/p>\n This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS.<\/span><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" CHART OF THE WEEK The jump in the unemployment rate from 3.8% to 4.0% in June is down to the… <\/p>\n","protected":false},"author":101016,"featured_media":7808,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148],"tags":[],"class_list":["post-7801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chart-of-the-week"],"yoast_head":"\n