The labour market’s recent deterioration threatens to nip the nascent recovery in consumer spending in the bud. Employment has begun to fall again and the forward-looking surveys suggest no imminent improvement. Meanwhile, pay growth has ground to a halt. Although the recent fall in oil prices has brightened the inflation outlook somewhat, the squeeze on real earnings is still set to intensify unless pay growth picks up soon. As a result, while consumer spending appears to have made a good start to 2013, we have our doubts that this momentum will be sustained.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services