The unemployment rate falls to 5.0% in January and exceeds estimates

• The change in jobless claims in the UK stood at + 86,600 in February.
• The unemployment rate in the UK fell to 5.0% in January.
• UK wages, excluding bonuses, were up 4.2% year-on-year versus 4.4% expected.

The Office for National Statistics (ONS) has shown on Tuesday that the UK’s official unemployment rate fell to 5.0% in January from the previous 5.1% and 5.2% expected, while the change in jobless claims has shown a solid increase last month.

The number of people claiming unemployment benefits increased by 86,600 in February compared to -20,800 recorded the previous month. The unemployment claim rate was 7.5% compared to 7.2% previously.

UK average weekly earnings excluding bonuses came to + 4.2% YoY in January versus + 4.1% previously and + 4.4% expected, while the indicator that includes bonuses was + 4.8% 3 in January compared to the previous + 4.7% and the + 4.9% expected.

Key points (via ONS):

Since February 2020, the number of employees on the payroll has been reduced by 693,000.

Those under 25 years of age contributed more than 60% of the fall observed since February 2020.

There was a small fall in the number of non-national employees from the UK last year.

Total hours worked continued to increase from the low levels of the previous quarter, this increase slowed in the last quarter.

The number of people who were temporarily absent from work due to the pandemic and were not paid increased slightly in the past three months.

Annual growth in the average salary of employees continued to strengthen.

About earnings in the UK

Average earnings excluding bonds published by National Statistics are a key short-term indicator. This data analyzes how payment levels change in the UK economy. It can also be viewed as a basic pay growth measure. A reading above expectations is bullish for the pound, while a reading below is bearish.