UK Unemployment Rate Steady At 44-Year Low

UK unemployment rate remained unchanged at the lowest level since late 1974 and employment hit a record in three months to April, despite Brexit uncertainties, data from the Office for National Statistics showed Tuesday.

In the three months to April, the ILO jobless rate was 3.8 percent, the lowest since the final quarter of 1974. The rate came in line with expectations.

At 76.1 percent, the employment rate was the joint-highest on record. The number of people in employment increased 32,000 to a record high of 32.75 million.

In May, the number of people claiming jobseekers allowances increased by 23,200 from the previous month. The claimant count rose slightly to 3.1 percent from 3 percent in April.

Average earnings, including bonuses, grew 3.1 percent year-on-year in three months to April, slightly faster than the expected 3 percent. Similarly, excluding bonuses, weekly earnings advanced 3.4 percent versus expected growth of 3.1 percent.

While employment growth is expected to slow over the rest of this year as the available pool of labor dries up, wage growth will probably remain healthy, Thomas Pugh, an economist at Capital Economics, said.

With the unemployment rate so low and wage growth robust, the Bank of England will remain on standby to raise rates if and when the effects of Brexit uncertainty wane, the economist added.

According to the third quarter ManpowerGroup Employment Outlook survey, hiring intentions in the UK private sector was the weakest since 2012. Hiring intentions of public sector employers lead over the private sector, with the gap being the biggest since Manpower began tracking the data eight years ago.

The Report on Jobs from IHS Markit, released last week, showed that hiring trends remained subdued amid Brexit-related uncertainty. Permanent placement decreased further in April, while temporary billings grew at the slowest pace for over six years.

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