1. Introduction

This article presents two analyses of the average weekly earnings (AWE) figures, which are published in the UK labour market statistical bulletin. These analyses are updated every month. The first section describes real AWE, which is AWE deflated by the Consumer Prices Index including owner occupiers’ housing costs (CPIH). The second section analyses wages and employment contributions underlying single month movements in the nominal AWE.

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2. Real average weekly earnings

The figures show the recent movements in real average weekly earnings (AWE – whole economy). This is calculated as nominal unadjusted AWE, divided by the Consumer Prices Index including owner occupiers’ housing costs (CPIH). This series is calculated for total pay (including bonuses, excluding arrears) and regular pay (excluding bonuses, excluding arrears) at the whole economy level and then seasonally adjusted. The data in Figures 1 and 2 are levels of real and nominal AWE, shown on a monthly basis, with an index of 2015 equals 100. Figure 3 shows three-month average year-on-year increases in these derived indices. The data are available in the EARN01 dataset, together with estimates of real AWE at 2015 prices.

Comparing the three months to February 2018 with the same period in 2017, real AWE (total pay) rose by 0.1%, compared with a 0% change in the three months to January 2018. Nominal AWE (total pay) grew by 2.8% in the three months to February 2018, while the CPIH increased by 2.5% in the year to February 2018 (following increases of 2.7% in the year to both December 2017 and January 2018).

In the same three-month period, real AWE (regular pay) rose by 0.2%, that is, 0.3 percentage points more than the three months to January 2018. Nominal AWE (regular pay) rose by 2.8% in the three months to February 2018.

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3. Contributions to nominal average weekly earnings – single month

The wages and employment contributions underlying the latest average weekly earnings (AWE) data are available in the EARN02 dataset each month. The “employment contribution”, shown in these figures, changes if the relative proportion of employment in the 24 industrial headings changes, but will not necessarily change if total employment increases. Employment contributions were significantly negative in 2009 and 2010, caused largely by a shift away from employment in financial and insurance activities, which are relatively highly-paid industries. In the period since 2015, the employment contribution has generally been slightly positive.

Figures 4 and 5 summarise the recent figures.

Employment contributions were negative 0.1% for total pay and 0% for regular pay in February 2018.

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Contact details for this Article

Roger Smith
earnings@ons.gsi.gov.uk
Telephone: +44 (0)1633 456120