What's going on?
New data released on Tuesday showed UK employment hitting a record high across December, January, and February.
What does this mean?
There were more people working in the UK between December and the end of February than ever before – thanks in part to more women joining the office party. But it was bittersweet: those women may be working out of necessity as the UK female state pension age increases from 60 to 65, meaning fewer retirees between those ages.
Average wages were 3.4% higher than a year ago – and, importantly, they rose faster than the prices of British goods and services. All else equal, therefore, the average Brit should now have a little extra cash burning a hole in their pocket.
Why should I care?
For markets: The fading Brexit specter may alleviate some tension.
With the UK’s exit from the European Union now delayed (potentially until October), consumers whose confidence in the economy was shaken by the prospect of a no-deal departure may now feel more confident spending their extra income. As the world’s fifth-largest economy, a pickup in British consumer spending could spell good news for companies around the world. America’s PayPal and eBay in particular make a significant proportion of their sales in the country, and should benefit from greater revenues if consumers spend more. And as the eurozone’s second-largest export destination, higher UK spending should bode well for European companies too.
Zooming out: Germany’s a stick-in-the-mud.
A persistently weak German manufacturing industry may shortly force its government to slash economic growth forecasts. And the German economy’s precarious position wasn’t helped by homegrown airline Lufthansa warning investors late on Monday that its first-quarter loss would be even worse than expected, partly thanks to rising fuel costs. Consumers once again offered Germany some respite, however: Europe’s largest online fashion retailer, Zalando, bucked the trend set by rival ASOS and announced a surprise quarterly profit – helping its stock rise 10% on Tuesday.