August 13, 2024

✅️Unemployment
UK unemployment declined to 4.2% in 3 month to June against 4.4% in May. The drop was rather unexpected by the market as recent dynamics pointed to rapid rising from the end of last year when the indicator climbed from 3.8% in December 2023 to 4.4 in May. The slowdown indicates the labor market easing took a break which is negative sign for the prospect of rate cuts as police-makers regard tight labor market as a major risk for inflation to decline below target of 2%. However it is a positive signal for those who worries about possible recession in the economy as too fast rising in unemployment could force consumers to start spending less. On the whole the data still indicates a progress in labor market easing, if counted from the last half a year, and today’s decline could be regarded as a correction (see chart). Let’s see what next release brings in.
✅️Claimant Count Change
UK claimant count change rocketed by 135.000 in July against 36.200 in June. Rather quick jump, indicating easing in labor market gains power starting in April 24(see chart). The result contradict the decline in unemployment rate in June probably hinting it will resume its upward going soon.
✅️Employment Change
UK employment increased by 97.000 in 3 month to June against 19.000 rise in May. This was the second consecutive gain after four month of deep declines which pushed 3-month moving average as low as -157.000 in April 2024. The last two readings however helped to return MA to near zero level at -7.600 (see chart). The indicator also points out to labor market tightening which will make the BoE’s work harder in deciding the next step in monetary policy on its meeting in September.
✅️Average Weekly Earnings
UK average weekly earnings rose by 4.5% in 3 month to June over the year compared with a jump by 5.7% in May. Quite a considerable slowdown confirming a downtrend in indicator starting in July 2023(see chart).
The result is rather positive for the prospect of rate cuts as it shows the wage pressure on inflation is weakening steadily.