Stocks to eye as real wages take 2.9% hit: PSON, DEC, INVP

October 12, 2022 12:00 AM PDT | By Abhishek Sharma

Stocks to eye as real wages take 2.9% hit: PSON, DEC, INVP — Image source: © Thadthum | Megapixl.com

Highlights:

The ONS has released the latest data on the UK's labour market.

Wages took a hit when adjusted for inflation, painting a worrisome picture for workers amid the cost-of-living crisis.

Even as the high prices continue to trouble Brits, forcing them to cut down on discretionary expenses, they have been hit by another concern - wage growth. The latest numbers from the Office for National Statistics (ONS) paint a worrisome picture of the current state of wages amid the high inflation rates in the UK.

Regular pay, excluding bonuses, grew 5.4% in the quarter to August. However, when adjusted for inflation, it fell by 2.9%. On the other hand, the average wages, including bonuses, rose 6% but fell by 2.4% in real terms.

ONS hinted that this is one of the strongest growth in pay outside the COVID-19 pandemic period. However, this is also among the largest falls in real terms ever recorded since the records began in 2001, even though it is smaller than the 3.0% fall witnessed in the quarter to June 2022, ONS added.

The average regular pay growth for the private sector stood at 6.2%, while for the public sector, it was 2.2%.

Besides, the employment rate for June to August 2022 slipped slightly by 0.3 percentage points to 75.5% over the previous three months. This rate is 1.0 percentage points lower than the pre-pandemic period.

The economic activity rate also rose by 0.6% during the period against the previous quarter, hitting 21.7%.

Let us now dive into some FTSE stocks and explore their performances in the current situation.

Pearson plc (LON: PSON)

Pearson is a leading publishing and education firm listed on the FTSE 100 index. Holding a market cap of £6,669.22 million, the company currently has a one-year return of 22.84%. The year-to-date or YTD return is 48.34%, while the EPS is positive at 0.21. PSON shares traded 0.79% lower at GBX 909.40 as of 12:43 pm GMT+1 on 11 October.

Diversified Energy Company plc (LON: DEC)

The oil and gas producer is listed on the mid-cap-focused FTSE 250 index, boasting a market cap of £1,114.86 million. Its EPS is in the red at -0.03, while the 12-month return is 0.54%. On a YTD basis, the stock price witnessed a spike of 24.14%. On Tuesday, the Diversified Energy Company plc’s shares were trading at GBX 129.50, 1.22% lower at 1:44 pm GMT+1 on Tuesday.

Investec plc (LON: INVP)

Investec is a financial services provider with a market cap of £2,737.00 million. The FTSE 250 constituent's share price has climbed 35.63% over the past year, while it has increased by 4.37% on a YTD basis. Shares of INVP were trading 0.31% higher at GBX 394.40 as of 1:49 pm GMT+1 on Tuesday.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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