Earnings Back to Pre-Coronavirus Levels in UK, Keeping GBP Bullish - Forex News by FX Leaders
UK Unemployment Claims December

Earnings Back to Pre-Coronavirus Levels in UK, Keeping GBP Bullish

Posted Tuesday, January 26, 2021 by
Skerdian Meta • 2 min read

Earnings were quite high in the UK in recent years, increasing by more than 3% on a quarterly basis, until the coronavirus broke out. In May they turned negative, as the economy headed down due to the lockdown restrictions, and they kept declining until August.

In September they turned positive again, and have they been increasing since then, getting back to pre-coronavirus levels. Restrictions were increased in the UK again this winter, but earnings keep increasing nonetheless, although when the report is released next month, we will see how they were affected in December.  This positive performance has turned the GBP bullish, with the GBP/USD increasing by around 80 pips since then.


US Employment Report November 

  • November average weekly earnings +3.6% vs +2.9% 3m/y expected
  • October earnings were +2.7%; revised to +2.8%
  • November average weekly earnings (ex bonus) +3.6% vs +3.2% 3m/y expected
  • Prior earnings excluding bonuses +2.8%
  • December jobless claims change 7.0k vs 64.3k prior
  • November claims were 64.3k; revised to 38.1k
  • Claimant count rate 7.4%
  • Prior claimant count rate 7.4%; revised to 7.3%
  • November ILO unemployment rate 5.0% vs 5.1% expected
  • October unemployment rate was 4.9%
  • November employment change -88k vs -104k expected
  • October employment change -144k

There was a slight delay in the release by the source. UK jobless claims came in much lower last month compared to November, but the data is arguably still somewhat distorted by the furlough scheme for the most part.

This comes against the backdrop of another fall in employment for a seventh consecutive month in the three months until November. ONS notes that UK redundancies hit a record high in the three months until November and says the number of people temporarily away from work rose slightly in November itself.
As for the jump in pay growth/wages, ONS says that current rates are being impacted upwards due to the fall in the number and proportion of lower-paid jobs compared with pre-coronavirus figures.
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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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