Weak jobs report in the UK: while the unemployment rate dropped to 4.6% in March, wages continue struggling. Headline wages rise by 2.4% y/y, as expected. But when excluding bonuses, they slipped to 2.1% y/y. Real earnings fall for the first time in 2.5 years. Jobless claims are also disappointing: a rise of 19.4K. In addition, the previous number is revised to a jump of 33.5K, worse than predicted.
GBP/USD now trades 1.2940, maintaining the range and not going anywhere fast.
The UK was expected to report a small rise in jobless claims in April: 7.5K against 25.5K in April. The unemployment rate was projected to remain unchanged at 4.7% in March. Wages were predicted to rise by an annual level of 2.4% in March after 2.3% in February. Excluding bonuses, wage growth was forecast to remain at 2.2% y/y.
This is the last jobs report before the elections on June 8th. With the recent rise in inflation, there are worries about standards of living in the UK. The price rises outpace the advance in wages, making Brits poorer. Headline inflation reached 2.7% in April.
The pound was trading in the 1.29 handle.While the pair holds on to the high ground, it is unable to break 1.30. The elections announcement helped sterling leap, but the economy holds it back.
