GBP/USD hovers around 1.3850 after UK jobless rate disappoints with 4.8% in May

UK claimant count change arrived at -114.8K in June.
The unemployment rate in the UK rose to 4.8% in May.
The UK wages excluding bonuses rose by 6.6% YoY vs. 6.6% expected.

Dhwani Mehta FXStreet

The Office for National Statistics (ONS) showed on Thursday, the UK’s official jobless rate rose to 4.8% in May vs. the previous 4.7% and 4.7% expected while the claimant count change showed a massive drop last month.

The number of people claiming jobless benefits showed a sharp drop of 114.8K in June when compared to -92.6K seen previously. The claimant count rate came in at 5.8% vs. 6.2% last.

The UK’s average weekly Earnings, excluding bonuses, arrived at +6.6% 3Mo/YoY in May versus +5.7% last and +6.6% expected while the gauge including bonuses came in at +7.3% 3Mo/YoY in March versus +5.7% previous and +7.2% expected.

Key points (via ONS)

Employment estimate shows 356,000 more payrolled employees than in May.

Compositional and base effects have inflated headline pay growth.

Underlying pay growth in the UK is around 3.2% to 4.4%.

GBP/USD reaction

GBP/USD stalls the bounce above 1.3850 on mixed UK jobs report.

The spot was last seen trading at 1.3850, down 0.05% on the day, as the focus shifts to the US data and more Fed Chair Powell.

About UK jobs

The UK Average Earnings released by the Office for National Statistics (ONS) is a key short-term indicator of how levels of pay are changing within the UK economy. Generally speaking, the positive earnings growth anticipates positive (or bullish) for the GBP, whereas a low reading is seen as negative (or bearish).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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