Morning Equity Briefing
Market Comment
Live Register and retail sales data reflect fragile economy
Aidan Corcoran
Yesterday's double release by the CSO showed an economy struggling to establish an upward trajectory.
The Live Register rose again in August, increasing by 2,500 to 455,000 in seasonally adjusted terms. The rise is more modest than July's 8,500 person increase but was still enough to push the estimated unemployment rate to 13.8%, its highest value since July 1994. The high figure for females joining the register (1,900 this month) suggests that the increase may be largely due to knock-on effects from layoffs in the construction sector and from reduced public expenditure.
It is worth remembering that the Live Register itself does not measure unemployment and that many claiming benefit are not unemployed. But the trend in Live Register figures is used to extrapolate from the latest available unemployment rate (12.9% for Q1 2010). When the Quarterly National Household Survey is published (the Q2 survey is due later this month), it may show that changing migration flows are easing a little of the pressure on the unemployment rate.
Retail sales ex-motor fell 1% month-on-month in volume terms in July (-2.5% on the year). The decline was only 0.6% in value terms, showing that prices have broadly stabilised. Meanwhile, the August Markit Economics manufacturing purchasing managers’ index edged down to 51.1 from 51.4 in July. A number above 50 is still consistent with expansion, but the trend has been falling since April. With retail sales and unemployment figures pointing to weak domestic demand, it seems that some boost from global demand may be needed to shore up the Irish recovery.