The GBP/USD was at a standstill after the release of the UK’s Labor data. The pair was trading at 1.3558 which was slightly lower than the previous day.
UK Employment Data
The number of payroll employees in the UK showed a monthly increase in June. The numbers were up 356,000 to 28.9 million. However, the numbers were still 206,000 before the pre-pandemic levels.
Since the start of the pandemic, the employment rate has decreased while the unemployment rate has increased. This had the GBP/USD pair on an unstable trend. However, since the end of 2020, both the employment and unemployment rates signaled a recovery.
March to May 2021 indicate a quarterly decrease in the unemployment rate while employment and economic inactivity rates increased. With the easing of lockdown, restrictions, total hours worked increased.
UK employment rate was estimated to be 74.8% which was 1.8% lower than the pre-pandemic levels. The unemployment rate in the United Kingdom was estimated at 4.8% which was 0.9% higher than the pre-Covid era. UK economic inactivity rate came in at 21.3% and was higher than the pre-pandemic levels.
The number of job vacancies from April to June 2021 came in 77,500 (9.9%) higher than its pre-pandemic levels. The number of estimated job vacancies was 862,000 which was a 38.8% growth compared with the last quarter.
US Economic Outlook
The GBP/USD pair edged higher after the US PPI data on Wednesday. The final demand index for June came in 1.0% higher beating the 0.6% estimate. The PPI index rose 7.3% YoY which was the highest level since November 2010.
The increase in prices for final demand services was the biggest contributor to the advance in the final demand index.
The GBP/USD will react to the weekly US initial jobless claims data. economists expect the claims to drop to 360,000 from 373,000.
Jerome Powell’s appearance before the Congress is still on for Thursday. According to the Fed chair on Wednesday, the Federal Reserve is not ready to alter its monetary policy. Powell reiterated that current inflation could be transitory. The Fed will consider tapering its monetary stimulus amid stable inflation growth.