06 Nov 2019
Irish Economy: Unemployment falls below 5%
The unemployment rate fell to a fresh 12-year low in October of 4.8%.
Although this was a modest 10 basis point reduction in the month, significant downward revisions were made to September’s rate which is now put at 4.9% from an initial 5.3%. These revisions were partly due to a methodological change at the CSO in the way it incorporates data from the quarterly Labour Force Survey (LFS), and should eliminate the need to revise the unemployment rate when it releases the next LFS (as has traditionally been the case). There are now 19,400 less unemployed people in the country compared with one year ago, which is a 14% reduction y/y, and the unemployment rate itself is 90bps lower over the period.
Prior to this release, it had appeared that downward momentum in unemployment had stalled somewhat, although we still expected further declines to come once the labour market avoided a significant Brexit-induced dislocation. Partly thanks to the impetus provided by the CSO’s revisions, this downward momentum has been restored and the unemployment rate now looks set for a similar reduction in 2019 as seen in 2018.
UK Parliament dissolved
The UK general election campaign starts in earnest now ahead of the vote on December 12th. Parliament was dissolved in the early hours of this morning and is set to be recalled on 16 December, the Monday following the election. PM Boris Johnson will visit Buckingham Palace to notify the Queen of the dissolution later this morning.
Things didn’t get off to a great start for the Tories yesterday after the Leader of the house of Commons, Jacob Rees-Mogg suggested on a radio interview that the many of the victims of the horrendous Grenfell Tower tragedy of 2017 lacked “common sense” for not leaving the burning building sooner than they did. Not surprisingly an apology was issued shortly thereafter.
Labour leader, Jeremy Corbyn (speaking at a function in “leave” voting Harlow, Essex), who is often accused of being mealy mouthed in relation to Brexit issues drove home his party’s promise to get a new deal from Brussles and then put that deal (along with a stay option) to the people in the shape of another referendum within six months of him becoming PM. Liberal Democrat leader, Jo Swinson, launched their campaign by saying that she could “do a better job as PM than Corbyn or Johnson” and in a positively scathing attack on Labour leader, Jeremy Corbyn, she “absolutely categorically” ruled out working with him in any type of coalition arrangement, saying that he is ““not fit for the job of prime minister”.
Euro slide stops on better German data
The benchmark EUR/USD had dropped over 100 points from the 1.1175 highs of late last week as positivity around US/China trade talks and significantly better US economic data, in the shape of a strong US non-manufacturing ISM print, released yesterday.
German data released earlier this morning seems to have put a bottom on EUR/USD for the time being at least. German manufacturing orders beat expectations in September, posting a 1.3% surge on the month (consensus +0.1%), with August’s 0.6% drop revised up slightly to record a 0.4% decline. Industrial production (also for September) is scheduled for tomorrow, while Q3 GDP is due on Thursday next week and may well show a small decline on the quarter, confirming that the Federal Republic is in a technical recession.
EU 09.00 Composite PMI
EU 09.00 Services PMI
EU 10.00 Retail sales