June 23, 2024

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BREAKING: GBP Depreciates After UK Employment Data

BREAKING: GBP Depreciates After UK Employment Data

The UK employment report for April and employment change data for May were released at 7am today. The report was expected to show a small decline in employment in May, as well as a modest 3-month/3-month employment decline for April. The unemployment rate was unchanged at 4.3% and wage growth was unchanged from its March pace.
The actual data turned out to be mixed – the unemployment rate rose, overall wage growth accelerated, while base wage growth remained unchanged. The 3-month employment change moderated from the previous month, but was higher than expected. Job turnover in May showed a smaller-than-expected decline.

UK employment report for April

  • Employment Change (3M/3M): -139k vs -98k expected (-177k previously)
  • Unemployment rate: 4.4% vs. 4.3% expected (4.3% previously)
  • Wage growth: 5.9% year-on-year vs. 5.7% forecast (5.7% previously)
  • Pay growth (excluding bonus): 6.0% YoY and 6.0% YoY expected (Previously 6.0% YoY)
  • Employment change (monthly May): -3k vs -10k expected (-85k previously)

Following a rise in the unemployment rate and the release of weaker-than-expected employment data, the GBP underreacted to more than a negative acceleration in wage growth. GBPUSD pulls back from the 50-period moving average after the release (green line).

Source: xStation5

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