Morning Brief – UK soft jobs data

The British pound has surged, despite softer jobs figures this morning, as official data showed the number of people in work in the United Kingdom went up by 102 thousand in the three months to May 2023.

Sterling rose above the 1.2900 level despite below market forecasts of a 125,000 rise and following a 250,000 jobs number advance in the previous period.

It was the smallest growth from year to date, as decreases were seen in the number of part-time self-employed and full-time employees, with the latter remaining above pre-pandemic levels.

On the other hand, workers continued to increase for part-time employees and full-time self-employed, which may have been a reason why we have seen the price rise.

The unemployment rate in the United Kingdom rose to 4.0 percent in March to May 2023, the highest level since the last quarter of 2021 and above market expectations of 3.8 percent.

The number of unemployed increased by 77 thousand to 1.37 million, driven by people unemployed for up to 12 months, while employment levels rose by 102 thousand to 33.05 million, mainly attributed to part-time employees, but missed the market consensus of a 125 thousand advance.

Wages, excluding bonuses, were 7.3 percent higher than a year earlier during the three months to May, the largest increase seen outside of the COVID-19 pandemic, and above forecasts of 7.1 percent. Total pay growth has also accelerated to 6.9 percent, above expectations of 6.8 percent.

Data was released from Europe this morning, showing that the ZEW Indicator of Current Conditions for Germany dropped to -59.5 in July 2023 from the previous month’s reading of -56.5 and broadly in line with market expectations of -60. It was the weakest reading since last December.