UK ILO Unemployment Rate drops to 3.8% in April vs. 4.0% expected

The UK Unemployment Rate unexpectedly drops to 3.8% in the three months to April.
The Claimant Count Change for Britain arrived at -13.6K in May.
The UK Average Earnings excluding bonuses rose 7.2% YoY in April vs. the 6.9% increase expected.

Dhwani Mehta FXStreet

According to the latest data published by the Office for National Statistics (ONS) on Tuesday, the United Kingdom’s (UK) ILO Unemployment Rate inched lower to 3.8% in the quarter to April from the 3.9% recorded in the three months to March, beating the market consensus of a 4.0% print.

The Claimant Count Change also showed a bigger-than-expected decline. The number of people claiming jobless benefits dropped by 13.6K in May, compared with the expected decrease of 9.6K. The Claimant Count Change unexpectedly jumped by 23.4K (an upward revision from 46.7K) in the previous month.

The UK’s average weekly earnings, excluding bonuses, arrived at 7.2% 3Mo/YoY in April versus 6.8% prior and 6.9% expected. The gauge including bonuses came in at 6.5% 3Mo/YoY in the fourth month of the year versus 6.1% previous and 6.1% expected.

It’s worth noting that the April data includes the impact of a 9.7% rise in the minimum wage and, therefore, will be closely analyzed by the Bank of England (BoE) as it stays committed to tame inflation.

Key points (via ONS)

In May 2023, 23,000 more people were in payrolled employment when compared with April 2023.

National statistics says inactive workers because of long-term sickness hits new record high.

UK May payrolls change 23k vs -135k prior.

The UK Minister for Employment, Guy Opperman MP told FXStreet: "Our drive to get more people into work and grow the economy has seen inactivity fall for the fifth month in a row. Vacancies continue to drop, employment is up and the numbers on company payrolls are also up.”

“We’re investing £3.5 billion to remove barriers to work - with extra support for people with health conditions, an expansion of free childcare and arming jobseekers with the skills they need through tailored training and extra work coach time,” the Minister added.

GBP/USD reaction

GBP/USD extends its recovery momentum and scales 1.2550 after the mixed UK employment data. The pair is trading 0.40% higher on the day at 1.2558, as of writing.

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, 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.

AUD/USD eyes 0.70 as China GDP surprise powers rally

The Australian Dollar registers two days of consecutive gains versus the US Dollar, trading at 0.6980, up more than 0.50% as risk appetite improved, while the Aussie was supported by strong data on China’s GDP and Retail Sales.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold drops to daily lows below $4,150

Gold builds on Friday’s retracement and slips back below the $4,150 mark per troy ounce on Monday. The better tone in the US Dollar and a decent bounce in US Treasury yields across the curve keep the yellow metal under pressure for now.

Multicoin’s top holding is Hyperliquid as HPC pushes SEC on airdrop rules

Multicoin Capital has identified Hyperliquid as the largest holding in its hedge fund, reaffirming its commitment to crypto investments despite growing interest in artificial intelligence.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold is struggling to capitalize on a weaker US Dollar, after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.