Talking Points:
- The UK Unemployment Rate unchanged at 5.1%, as expected
- Average weekly earnings printed 1.8% vs 2.3% expected
- British Pound little changed after the figures hit the wires
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The British Pound was little changed versus other major currencies (at the time this report was written) after today's UK employment data printed figures short of expectations. The Office for National Statistics (ONS) reported that the unemployment rate from December to February remained unchanged at 5.1%, as the prior and expected rate.
The UK added 20K jobs in the same time period, which was below the expectation for an addition of 60K jobs and the prior 116k print. The number of people employed stands at 31.41 million. The Jobless Claims figure fell short of expectations and signaled a rise of +6.7K, which was worse than the expected -10.0K figure. This marked the first jobless increase since August 2015. The prior reading was revised to -9.3K from the -18.0K print.
Wage figures showed that Core Average Weekly Earnings (which excludes bonuses) was 2.2% in the last three months, same as the prior figure, which was better than the 2.1% figure expected by economists. However, Average Weekly Earnings including bonuses dropped to 1.8% from the prior 2.1%, below the 2.3% expected print.
Looking into the report, the ONS said the employment rate, which is the proportion of people aged from 16 to 64 who were in work was 74.1%, the joint highest since comparable records began in 1971.
In their latest police meeting, the Monetary Policy Committee (MPC) commented that uncertainty surrounding ‘Brexit’ weighed on the Sterling. The MPC remarked that referendum effects are likely to make macroeconomic and financial market indicators harder to interpret over the next few months, which will make the committee more cautious in interpreting data in the coming months.
As was mentioned today by DailyFX Currency Strategist Ilya Spivak, coming into the day it seemed unlikely the figures will deliver significant volatility to the British Pound because of limited implications for near-term BoE policy. This might explain price action after the report, which saw the British Pound sliding initially but quickly recovering and leveling off versus other major currencies.
GBPUSD 5-Minute Chart: April 20, 2016
--- Written by Oded Shimoni, DailyFX Research
