In normal times, the largest spike in unemployment claims since records began in 1971, would cause the pound to plummet. But in these unforeseen times, markets have continued to focus away from economic data.
This morning the Coronavirus crisis in the UK was highlighted, when figures showed a further 857,000 people made unemployment claims in April, the largest spike since records began, taking the percentage of people claiming benefits in the UK to 5.8%. This beat the consensus market estimate by just shy of 200,000.
The claimant count increased by a staggering 69.1% to reach a total of 2.1 million.
**The Claimant Count is a measure of claims for Jobseeker’s Allowance and claimants of Universal Credit.
It must be noted that this doesn’t mean all of those who applied are unemployed, so next months economic data will be a more accurate representation of the current state of play in the UK.
Why has this occurred? It is partly caused by the UK governments response to the Coronavirus loosening criteria for those to file a claim. Regardless, of the cause, the data suggests a monumental surge in unemployment could be reported in the June set of figures, as it will also cover the April lockdown that essentially brought the world to a screaming halt.
Will the market pay more attention to this economic data next month? Only time will tell.