The UK Unemployment Rate remained steady at 4.4% for the three months to January. The Claimant Count Change for February saw an increase of 44.2K, significantly higher than January’s 2.8K and above the expected 7.9K.
Employment Change for January recorded an increase of 144K, compared to 107K in December. Average Earnings, excluding bonuses, increased by 5.9% year-on-year in January, consistent with previous growth.
Wage Growth Figures
Average Earnings, including bonuses, rose by 5.8% during this period, surpassing the anticipated 5.9%. Following the employment data release, GBP/USD traded at 1.2985, down by 0.02%.
The unemployment rate staying unchanged at 4.4% suggests stability in the labour market, but the jump in the number of people claiming unemployment-related benefits paints a picture of growing strain. A rise of 44.2K in the claimant count is not just a one-off move—it sharply contrasts with January’s minor 2.8K increase and overshoots what markets had expected. For those tracking employment dynamics, this is a figure that cannot be ignored, as it hints at potential shifts in hiring trends.
That said, other employment indicators tell a slightly different story. With employment numbers rising by 144K in January, building on December’s gain of 107K, job growth still has momentum. The wages data adds another layer to this. Regular pay, which strips out bonuses, maintained a steady year-on-year increase of 5.9%, showing that businesses are continuing to offer higher wages. When bonuses are factored in, the yearly rise stood at 5.8%, even if expectations were marginally higher.
Currency traders reacted with a muted response, with sterling edging down slightly against the dollar to 1.2985. With wage growth holding firm and the labour market sending mixed signals, markets will have to keep an eye on whether the economy is cooling or if inflation pressures remain sticky. If employment continues to rise while claimant numbers also increase, it could signal that underlying shifts are taking place that might not be immediately obvious from the headline rates.
Market Implications
For those involved in derivatives markets, the coming weeks will require attention to how policymakers interpret these figures. If central bankers focus on resilient wage growth, they could lean towards keeping monetary policy tight in order to contain inflation. On the other hand, if rising benefits claims start shaping their outlook, discussions about easing policy may become louder. Either way, volatility could remain a key theme, especially as traders recalibrate positions based on fresh data releases.
