UK Unemployment Rate Drops to New Cyclical Low
- The UK unemployment rate dipped to its lowest for 42 years to 4.6% in March, below both the expected 4.7% and the previous month’s 4.7%
- Average weekly earnings (3m YoY) edged up to 2.4% from 2.3% but remained below the 2.7% headline inflation rate, suggesting a further squeeze on consumers.
- GBP/USD barely reacted to the data.
The squeeze on UK consumers, the mainstay of the British economy, is continuing, with average weekly earnings (3m YoY) edging up to 2.4% from the prior 2.3% but remaining below the latest headline inflation figure of 2.7%. The number was as expected and GBP/USD barely moved on its release.
Moreover, excluding bonuses, there was an unexpected dip in average earnings to 2.1% from 2.2%, emphasizing the difficulties consumers face.
There was better news however in the accompanying jobs data, which showed an unexpected fall in the unemployment rate to a new cyclical low of 4.6% from the prior 4.7%. The claimant count rose to 19,400 from an upwardly revised 33,500 – worse numbers that the 7,500 increase predicted. Sterling, though, was barely affected, continuing to hover between 1.29 and the 1.30 round-number resistance level.
Chart: GBP/USD Five-Minute Timeframe (May 17 Intraday)
There was little to concern policymakers in the release and UK interest rates are still likely to remain unchanged for the foreseeable future.
--- Written by Martin Essex, Analyst and Editor
To contact Martin, email him at email@example.com
Follow Martin on Twitter @MartinSEssex
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