| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Claimant Count - M/M | -12,000 | 46,700 | 28,200 | 26,500 |
| Claimant Count Unemployment Rate | 4.0% | 3.9% | ||
| ILO Unemployment Rate | 3.8% | 3.9% | 3.8% | |
| Average Earnings - Y/Y | 5.8% | 5.8% | 5.9% | 5.8% |
Highlights
The March/April report was a mixed bag, including rises in both joblessness and employment and steady earnings growth.
Claimant count unemployment continued to increase surprisingly sharply in April. A 46,700 advance was nowhere near the market consensus and large enough to nudge the jobless rate a tick higher to 4.0 percent, a level not seen since May 2022. Still, the rate remains historically low.
Meanwhile, the ILO data also showed unemployment climbing a further 60,000 to 1.329 million in the first quarter. This was still 35,000 below its pre-Covid level but a large enough gain to lift the rate from 3.8 percent to 3.9 percent, a tick above market expectations. However, employment was very robust, posting a sizeable 182,000 jump to 32.995 million. This was its steepest increase since March-May 2022 and driven by strength in part-time employees and self-employed workers. As a result, the employment rate climbed 0.3 percentage points to 75.9 percent, matching its highest reading since February-April 2020. That said, while only provisional, the more timely estimate of payrolled employees showed a monthly 136,000 decline in April, its first fall since February 2021.
In a similar vein, vacancies also decreased again. A 55,000 drop in the three months to April extended the unbroken trend decline that began back in the May-July 2022 period although they remain some 257,000 above their pre-pandemic peak.
Finally, but of key importance to the BoE, overall wage growth was flat and in line with market expectations. A 5.8 percent first quarter headline rate matched their downwardly revised December-February outturn and was the lowest print since the three months to July last year. That said, regular earnings accelerated slightly and at a 6.7 percent rate, equalling a record high outside of the Covid period.
In sum, today's update contains something for the MPC's doves and hawks alike. However, most important is the ongoing buoyancy of regular wages and the latest rise here will support expectations for additional monetary tightening in June. The report puts the UK's ECDI at minus 8 and the ECDI-P at minus 5. Both readings are in negative surprise territory but not by much indicating that economic activity in general is performing much as expected.
Claimant count unemployment continued to increase surprisingly sharply in April. A 46,700 advance was nowhere near the market consensus and large enough to nudge the jobless rate a tick higher to 4.0 percent, a level not seen since May 2022. Still, the rate remains historically low.
Meanwhile, the ILO data also showed unemployment climbing a further 60,000 to 1.329 million in the first quarter. This was still 35,000 below its pre-Covid level but a large enough gain to lift the rate from 3.8 percent to 3.9 percent, a tick above market expectations. However, employment was very robust, posting a sizeable 182,000 jump to 32.995 million. This was its steepest increase since March-May 2022 and driven by strength in part-time employees and self-employed workers. As a result, the employment rate climbed 0.3 percentage points to 75.9 percent, matching its highest reading since February-April 2020. That said, while only provisional, the more timely estimate of payrolled employees showed a monthly 136,000 decline in April, its first fall since February 2021.
In a similar vein, vacancies also decreased again. A 55,000 drop in the three months to April extended the unbroken trend decline that began back in the May-July 2022 period although they remain some 257,000 above their pre-pandemic peak.
Finally, but of key importance to the BoE, overall wage growth was flat and in line with market expectations. A 5.8 percent first quarter headline rate matched their downwardly revised December-February outturn and was the lowest print since the three months to July last year. That said, regular earnings accelerated slightly and at a 6.7 percent rate, equalling a record high outside of the Covid period.
In sum, today's update contains something for the MPC's doves and hawks alike. However, most important is the ongoing buoyancy of regular wages and the latest rise here will support expectations for additional monetary tightening in June. The report puts the UK's ECDI at minus 8 and the ECDI-P at minus 5. Both readings are in negative surprise territory but not by much indicating that economic activity in general is performing much as expected.
Market Consensus Before Announcement
The ILO unemployment rate for the three months to March is expected to hold steady at 3.8 percent while average earnings growth is seen slowing a tick to 5.8 percent.
Definition
The Labour Market Report covers a number of key areas of the jobs market. Unemployment is updated on the basis of two separate surveys: the claimant count, which measures the number of people claiming unemployment-related benefits, and the more reliable but lagging International Labour Organization's (ILO) measure that excludes jobseekers that did any work during the month and covers those people who are both looking and are available for work. Average earnings growth, a key determinant of inflation, is also updated.
Description
The labour market survey gives the most comprehensive report on how many people are looking for jobs, how many have them and what they are getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.
