UK Employment Slides by 140k in April, Sending the Unemployment Rate to 4.4%

Labor Market Overview, UK – June 2024

The UK labor market was in focus on Tuesday (Jun 11). Labor market data for April could influence investor expectations of a June BoE interest rate cut.

Average earnings (incl. bonus) increased by 5.9% in the three months to April, year-over-year (3M/Yr). Economists forecast average earnings (incl. bonus) to rise by 5.7%. In March, average earnings (incl. bonus) advanced by 5.9% (3M/Yr).

The unemployment rate rose from 4.3% to 4.4%, with employment sliding by 140k after a 178k decline in March. Economists forecast employment to fall by 100k and a 4.3% unemployment rate.

According to the Office for National Statistics,

• The UK Claimant Count for May increased by 50,400 after a rise of 8,400 in April.
• Job vacancies fell by 12,000 from March 2024 to May 2024. Vacancies remained above pre-COVID-19 levels despite dropping for the 23rd consecutive period.

Bank of England Monetary Policy Implications

Elevated wage growth could support investor expectations of the Bank of England standing pat in June. Elevated wage growth could fuel consumer spending and demand-driven inflation. Sticky inflation could delay the timing of a Bank of England rate cut.

Nevertheless, the downward trend in employment and higher unemployment rate could signal a softer wage growth outlook, leaving a near-term 2024 BoE rate cut on the table.

GBP/USD Response to the UK Labor Market Data

Before the June UK labor market report, the GBP/USD fell to a low of $1.27169 before climbing to a high of $1.27388.

However, the GBP/USD reacted to the UK labor market data, rising to a high of $1.27397 before sliding to a low of $1.27213.

On Tuesday (June 11), the GBP/USD was down 0.03% to $1.27266.

Up Next

Later in the session on Tuesday, US economic indicators will attract investor attention. NFIB Business Optimism Index and Redbook numbers are in focus.

Economists forecast the NFIB Business Optimism Index to increase from 89.7 to 89.8 in May.

Better-than-expected numbers could impact investor expectations of a September Fed rate cut. However, on Wednesday, US inflation numbers, the FOMC Economic Projections, and the Press Conference will affect the global financial markets more.