Forex news – UK unemployment holds at 7.7% but for how long?
October 16, 2013 12:42 pm
(Claimant Count change m/m, Source: ONS, Reuters)
Today marked the release of the UK’s key employment figures from the Office of National Statistics. The unemployment rate has taken on added significance in recent months following the guidance by the Bank of England that it would not raise interest rates while the rate remains above 7%.
The announcement of unemployment of 7.7% for the June – August quarter was in line with expectations and the same as the May – July quarter.
Where the surprise lay was regarding the number of workers claiming unemployment benefits – the so-called claimant count – that fell 41,700 during September; a much bigger drop than expectations for a 25,000 fall. There was also a revision to the August numbers, boosting the drop to 41,600 from an initial announcement of 32,600.
This was good news for the UK economy, as was the announcement that the total number of workers reached 29.9 million, which is a new record. Less good for consumers was the news that average earnings rose by 0.7% year-on-year for the three months to August. This was less than expectations of a 1.0% rise and certainly much less than the going inflation rate of 2.7%.
Another challenge for the economy is that the number of jobs being created is roughly equal to the expansion of the labor force, which means that unemployment could refuse to fall as quickly as some economists expect.
Overall though, the figures are a positive sign that the UK economy is performing well and had a good third quarter.
(Claimant Count change m/m, Source: ONS, Reuters)
Today marked the release of the UK’s key employment figures from the Office of National Statistics. The unemployment rate has taken on added significance in recent months following the guidance by the Bank of England that it would not raise interest rates while the rate remains above 7%.
The announcement of unemployment of 7.7% for the June – August quarter was in line with expectations and the same as the May – July quarter.
Where the surprise lay was regarding the number of workers claiming unemployment benefits – the so-called claimant count – that fell 41,700 during September; a much bigger drop than expectations for a 25,000 fall. There was also a revision to the August numbers, boosting the drop to 41,600 from an initial announcement of 32,600.
This was good news for the UK economy, as was the announcement that the total number of workers reached 29.9 million, which is a new record. Less good for consumers was the news that average earnings rose by 0.7% year-on-year for the three months to August. This was less than expectations of a 1.0% rise and certainly much less than the going inflation rate of 2.7%.
Another challenge for the economy is that the number of jobs being created is roughly equal to the expansion of the labor force, which means that unemployment could refuse to fall as quickly as some economists expect.
Overall though, the figures are a positive sign that the UK economy is performing well and had a good third quarter.
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