Source: Sharecast
According to the Office for National Statistics, the unemployment rate was estimated to be 4.9% in the three months to April, up 0.3 percentage points on the year but down 0.3 percentage points on the last quarter. The market had been expecting no change.
Average earnings, meanwhile, ticked higher, rising 4.4% or 3.4% once bonuses were stripped out. Regular earnings increased 5.1% in the public sector, but by a more modest 2.9% in the private sector, the lowest rate in five and a half years.
A number of measures did point to some softening in the labour market, however. Payroll numbers continued to fall, by 0.5% year-on-year, with new recruits at their lowest level in five years. The claimant count for May was also higher, at 1.7m.
But Liz McKeown, director of economic statistics at the ONS, said: "The labour market remained broadly stable in the latest quarter.
"Overall employment was little changed, with some signs of workers moving into self-employment."
Danni Hewson, head of financial analysis at AJ Bell, said: “While the headline rate of unemployment has edged down slightly, pop the hood on the UK labour market and that good news is all but obliterated.
“The number of people starting new jobs has fallen to a five-year low, as has the number of vacancies. But a 0.3% jump in those classed as economically inactive could mean much of the fall in unemployment will simply be the result of job seekers giving up or changing tack.”
James Smith, developed markets economist, UK, at ING, said: “Private sector hiring looks weak, despite a superficially brighter May, and wage growth outside of government is slowing rapidly.
“We expect the Bank of England to keep rates on hold this year and return to rate cuts in 2027.”