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11/06/24
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GBP Ignores UK Unemployment Hike Ahead Of GDP
On Tuesday, the British pound drifted and GBP/USD traded at about 1.2720, down 0.08% for the day in the European session at the time of writing.
Earlier in the day, the May employment report for the UK was released. On Wednesday, GDP will be released with the market estimate for April at 0% m/m, after March’s gain of 0.4%.
The UK employment report today showed that the labor market is still easing, with a notable increase in unemployment. Unemployment benefit claims in May rose by 50.4K, up sharply from April’s revised 8.4K increase and higher than the 10.2K market estimate.
The unemployment rate rose to 4.4% in the 3 months to April, up from 4.3% in the prior period and the 4.3% market estimate.
Job growth is still slowing and it dropped by 139K. A key measure for the central bank, wage growth in the private sector, dropped to 5.8%, the lowest level since 2022. The decline in wage growth was impressive as the government in April increased the minimum wage by 9.8% and there were worries that a sharp increase would push wage growth up.
The Bank of England will be relieved by the job numbers, as it wants to see a weaker labor market before starting to lower rates.
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