KEY POINTS FOR UK EMPLOYMENT DATA
Actual UK unemployment in December was 3.7% vs. forecasted 3.7%.
Bonus (three months each year) (DEC) Actual 5.9% vs predicted 6.2%
In keeping with projections, the UK’s unemployment rate remained steady during the three months ending in December 2022. People between the ages of 16 and 24 account for the majority of those who have been jobless for up to six months. In the three months leading up to December, the number of individuals in the UK with jobs increased by 74K, above market expectations of a 40K increase and coming on the heels of a 27K gain in the previous month. The number of open positions decreased from 1,134K in November 2022 to 76K in January 2023, marking the seventh consecutive quarterly decline and indicating uncertainty across industries, according to survey respondents who continue to cite economic concerns as a reason for delaying hiring. UK Chancellor Hunt said that the labor market’s resiliency is a positive indication that unemployment is still close to record low levels.
MEDIAN EARNINGS INCLUDE In December 2022, salaries in the UK rose 5.9% over the same month the year before, exceeding expectations but falling short of the prior reading of 6.4%. The increase in average wages before bonuses, which rose to 6.7% after surpassing expectations of 6.5%, will cause the most concern. Comparing the numbers to market expectations of a 6.2% and 6.5% increase, respectively From October to December 2022, growth in total and regular pay declined on the year in real terms (inflation-adjusted terms), by 3.1% for total pay and by 2.5 for regular pay, respectively. This remains one of the greatest dips in growth since similar data began in 2001, albeit it is less severe than the record fall in real total pay we experienced from February to April 2009 (4.5%).
The UK labor market is expanding.
The BDO (accountancy and business advising firm) monthly business trends study revealed that UK firms want to recruit fewer people but pay more for those they need, suggesting that despite the encouraging figures released today, this appears certain to continue. The survey also revealed that UK companies want to recoup these expenses by boosting prices, which will alarm the Bank of England as it attempts to control inflation.
The next installment is due on March 2, and the Bank of England has expressed its opinions on the labor market and will be closely watching its decision-maker panel (a poll of businesses). This forecasting indicator of prospective wage and price pressures will give an idea of what to anticipate in the upcoming months.
Market response
From a larger technical standpoint, the GBPUSD price moved higher Wednesday, returning to the 50-day MA. We are still trading between the 200 and 50-day moving averages. If the 50-day MA is broken, the lower end of the range that was broken on February 2 (1.2270 region) is expected to act as resistance. If a prospective negative break is to make a big move to the downside, it must overcome the psychological 1.2000 handle as well as the 200 and 100-day MA.