UK May Unemployment Rate beats estimates with 3.9%, GBP/USD off lows

UK June jobless claims changed -28.1K vs +250K expected.
The UK wages excluding bonuses rose by +0.7% YoY vs. +0.5% expected.
The unemployment rate in the UK steadied at 3.9% in May.

Dhwani Mehta FXStreet

The Office for National Statistics (ONS) showed on Thursday, the UK’s official jobless rate remained unchanged from the previous 3.9% in May, while the claimant count change showed an unexpected decrease last month.

The number of people claiming jobless benefits fell by 28.1K in June, against expectations +250K and +528.9K seen previously. The claimant count rate eased to 7.3% vs. 7.8% last.

The UK’s average weekly Earnings, excluding bonuses, arrived at +0.7% 3Mo/YoY in May versus +1.7% last and +0.5% expected while the gauge including bonuses came in at -0.3% 3Mo/YoY in May versus +1.0% previous and -0.4% expected.

Key points (ONS)

“Pay growth negative for the first time since April June 2014.”

“Pay declined more in industries where furloughing was most prominent, in particular accommodation and food service.”

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).

GBP/USD reaction

Solid UK jobs data stalls the downside in GBP/USD, as the spot recovers from a low of 1.2545 to now trade at 1.2560, still down 0.16% on the day.

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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