UK jobless rate drops to 5.0% in January, beats estimates

  • UK claimant count change stood at +86.6K in February
  • The unemployment rate in the UK dropped to 5.0% in January.
  • The UK wages excluding bonuses rose by 4.2% YoY vs. 4.4% expected.

The Office for National Statistics (ONS) showed on Tuesday, the UK’s official jobless rate eased to 5.0% in January vs. the previous 5.1% and 5.2% expected while the claimant count change showed a solid rise last month.

The number of people claiming jobless benefits jumped by 86.6K in February when compared to -20.8K seen previously. The claimant count rate came in at 7.5% vs. 7.2% last.

The UK’s average weekly Earnings, excluding bonuses, arrived at +4.2% 3Mo/YoY in Jan versus +4.1% last and +4.4% expected while the gauge including bonuses came in at +4.8% 3Mo/YoY in Jan versus +4.7% previous and +4.9% expected.

Key points (via ONS)

Since February 2020, the number of payroll employees has fallen by 693,000.

Under 25s contributed over 60% of the fall seen since February 2020.

There was a small fall in the number of non-UK nationals in employment last year.

Total hours worked continued to increase from the low levels in the previous quarter, this increase slowed in the latest quarter.

Number of people temporarily away from work because of the pandemic and receiving no pay increased slightly over the last three months.

Annual growth in average employee pay continued to strengthen.

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

GBP/USD keeps the recovery mode intact around 1.3840, shrugging off the mixed UK labor market report.

The spot was last seen trading at 1.3841, down 0.16% on the day, courtesy of the worsening market mood.


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