Earnings growth hits 25-year low
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.AVERAGE earnings grew by 5 per cent over the year to November, a 25-year low, the Department of Employment said yesterday, writes Robert Chote.
The figures are good news for inflation as they suggest that the boost to import prices from the pound's devaluation may be offset by slowing pay costs, City economists said.
Earnings growth in manufacturing industry was unchanged at 5.75 per cent in the year to November, although the previous month's figure was revised down.
Earnings growth in service industries slowed to 5 per cent in the year to November, from 5.25 per cent in the previous month.
Pay settlements are falling sharply under the influence of lower inflation, squeezed profits and higher unemployment. November's figure included 3.6 per cent for 30,000 Rover employees, less than half their 1991 settlement. Firemen also settled for less than a year ago, 4.9 against 5.6 per cent.
December's earnings figures are also likely to see the benefit of lower settlements.
The CBI pay databank shows that settlements subsided to 3.1 per cent between September and November. The official figures outstrip settlements partly because of factors like promotions and because they cover all employees, not just those who settled in the latest period.
Roger Bootle, chief economist of Midland Global Markets, described the figures as extremely encouraging. For the first time since 1986, manufacturers could soon be paying less on wages and salaries to make each unit of output than the year before, he said.
Unit labour costs in the three months to November were 0.5 per cent higher than a year earlier, the smallest rate of increase since spring 1987. Productivity growth - the annual change in the amount of output produced by each factory worker - rose to a three-and-a-half year high of 5.4 per cent.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments