On Tuesday, the pound has continued to inch up after the UK jobs report. The data was mixed as unemployment improved substantially while pay growth dropped to the lowest level in two years.
The Office of National Statistics’ preliminary July data shows a 0.8% rise in employees versus July 2023, translating to 252K additional workers. The social work and health sector saw the most substantial annual growth and added 163K employees.
Regular pay excluding bonuses in the UK increased by 5.4% y/y and reached GBP 645 per week in the 3 months up to June. This was the smallest increase since Aug. 2022, down from an increase of 5.8% in the prior three months, yet higher than market expectations of 4.6%.
Wage growth was slower in both the public sector (6.0% vs. 6.4%) and the private sector (5.2% vs. 5.6%). The business services and finance sector showed the highest yearly wage growth rates at 6.2%. Real-term wage growth for pay excluding bonuses decreased slightly from 2.5% to 2.4% when adjusted for inflation.
The unemployment rate unexpectedly dropped to 4.2% versus the estimate of 4.5%. The number of unemployed individuals declined by 51K to reach a total of 1.44M, mainly due to drops among those unemployed for up to 6 months. This takes the number to lower than last year’s levels.
