Talking Points:
- The UK unemployment rate remained unchanged at 5.1%, below expectations
- Core weekly earnings rose to 2.0%, above expectations
- Employment rate at 74.1% , highest since 1971
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The British Pound recovered from an initial drop versus the US Dollar after today's UK employment data printed mixed figures compared to expectations. The Office for National Statistics (ONS) reported that the unemployment rate remained unchanged at 5.1% from October to December, below the 5.0% rate expected by economists. The UK added 205K jobs in the same time period, which was below the expectation for an addition of 225K jobs. The number of people employed rose to 31.42 million. The Jobless Claims figure beat expectations and signaled a drop of -14.8K, which was better than the expected -3.0K figure. The prior reading was revised to -15.2K from the prior -4.3K. Wage figures showed that Core average weekly earnings (which excludes bonuses) rose to +2.0% in the last three months, better than the +1.8% figure expected by economists, and the prior +1.9% figure. Average weekly earnings including bonuses slowed to +1.9% from the prior +2.0%, as was expected by economists. Looking into the report, the ONS said that the employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.1%, which is the highest since 1971.
In their latest policy meeting, the BoE commented that risks to inflation projections are skewed a little to the downside in the near term. As was mentioned earlier today by DailyFX currency Strategist Ilya Spivak, traders seemed to be more interested in wage growth figures, as wage growth may offset some of the downside price pressures. The better than expected print in the Core figure may have slightly eased the more dovish market outlook for the BoE as of late, and the British Pound recovered from an early dip to rally versus the US Dollar.
GBPUSD 5-minute Chart
