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UK Paying More for Fewer Workers

• UK unemployment jumped surprisingly far in February 2024 to hit 4.2% as employment fell. More long-term jobless suggests this is neither a new shock nor too disinflationary.
• Average earnings growth surged by 0.7% m-o-m, meaning the wage bill still rose despite fewer jobs. Regular pay growth is in rude health at 6% y-o-y or 2.1% in real terms.
• Wage settlements are stuck at 5%, with a skew higher into April. Embedded inflation expectations are too high and demand tight policy despite some cyclical softening.

By Philip Rush

Canada CPI Inflation 2.9% y-o-y (consensus 2.9%) in Mar-24

- Canada's annual CPI inflation rate in March 2024 crept up to 2.9%, in line with market expectations, returning to the highest growth since December 2023.
- However, disinflation has left the current rate 0.42 percentage points below the one-year average while core measures kept slowing and to a surprising extent.

Sweden CPI Inflation 4.1% y-o-y (consensus 4.4) in Mar-24

- Sweden's CPI inflation in March 2024 slowed to 4.1% y-o-y, well below the consensus expectation of 4.4% and marking the lowest growth rate since January 2022.
- Although the inflation rate remains high, it is 2.86 pp below the 1-year average. The CPIF also slowed surprisingly far to 2.2%.

China CPI 0.1% y-o-y (consensus 0.4%) in Mar-24

- China's CPI growth in March 2024 was 0.1% y-o-y, significantly below market consensus and marking the lowest growth since January 2024.
- Although the figure is 0.18pp above the one-year average, the slight improvement from falling prices emphasises the problem's persistence.