UK ILO Unemployment Rate edges higher to 3.9% in March vs. 3.8% expected

The latest data released by the Office for National Statistics (ONS) showed on Tuesday that the United Kingdom’s (UK) ILO Unemployment Rate rose to 3.9% in the quarter to March from the 3.8% registered in the three months to February, above the 3.8% expected. This is the highest reading in more than a year, and signals that the UK labor market is gradually cooling down.

The claimant count change also showed an unexpected increase. The number of people claiming jobless benefits jumped by 46.7K in April, compared with an expected 10.8K decline and after a 26.5K increase the previous month.

The UK’s average weekly earnings, excluding bonuses, arrived at 6.7% 3Mo/YoY in March versus 6.6% prior and 6.8% expected. The gauge including bonuses came in at 5.8% 3Mo/YoY in the third month of the year versus 5.8% previous and 5.1% expected.

Key points (via ONS)

UK vacancies fell by 55,000 in three months to April.

UK economic inactivity rate decreased by 0.4 percentage points on the quarter to 21.0% in Q1.

UK LFS unemployment +60k to 1.329 mln 3m/3m in Q1.

The UK Minister for Employment, Guy Opperman MP told FXStreet: "We're continuing to see progress in the labour market as we take action across government to grow the economy. Employment is up; economic inactivity is down; and vacancies have fallen in successive quarters.”

"As well as helping deliver on our priority to grow the economy, we know that being in work remains the best way for people to get on in life. That's why I'm focused on matching jobseekers with roles, and businesses with a resilient and skilled workforce. Through partnerships with local employers, we have thousands of placements in sectors such as banking and engineering, helping people to achieve new qualifications and build rewarding careers,” the minister added.

GBP/USD reaction

GBP/USD came under renewed bearish pressure and gave up 1.2500 on the mixed UK employment data. The pair is trading 0.29% lower on the day at 1.2492, 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).