The fall in unemployment and the impact on the GBP/USD
The unemployment rate in the UK has fallen in the last three months since April. Companies have increased employment in response to easing restrictions related to the coronavirus pandemic; official data showed today.
The unemployment rate fell by 0.3 percentage points quarterly to 4.7 percent in the three months to April, the Office for National Statistics reported. The rate coincided with the expectations of economists. The employment rate rose 0.2 percentage points to 75.2 percent. The recent lull is unlikely to last, and the remaining months of 2021 are likely to be turbulent for the job market, said James Smith, an ING economist. Unemployment will rise in September, although the jump will be much less pronounced than it could be if support stopped earlier, the economist noted. The annual growth of the average salary of employees continues to grow.
Average earnings, including the bonus, grew by 5.6 percent a year in the three months to April, well above the economists’ forecast of 4.9 percent. The level of employment is still significantly below pre-crisis levels, and basic wage growth is much weaker, suggesting that there is still backwardness in the labor market, said Thomas Pugh, an economist at Capital Economics.
Pugh noted a weak labor market would prevent a large increase in basic wages by putting pressure on inflation.
The data showed that in May, the number of applicants decreased by 92,600 compared to the previous month. The claimant count rate is fell to 6.2 percent from 6.4 percent in April. The number of vacancies from March to May was 758,000, only 27,000 below the level before the coronavirus pandemic from January to March 2020.
Looking at the chart on the daily time frame, we see that we will probably go down to test the psychological zone again at 1.40000 and the lower support line that coincides with the MA50 moving average. We can expect some support for this pair and rejection and continuation of the bullish trend towards 1.42000. A break below the support line leads the pound and negative territory to 1.39000. The MACD indicator also gives us a bearish signal which matches this pullback on the chart.
