Despite a fall in the headline unemployment figure for the UK, the overall picture of the labour market remains mixed. The FTSE 100 has traded slightly on the soft side so far today and is lower by 14 points at the time of writing. The pound is little changed against most its major crosses.
The devil is in the detail
The unemployment rate for the UK has fallen to its lowest level in over a decade, with the drop to 4.8% being announced this morning. Whilst the news seems positive on the face of it, it should be noted that this data is lagging by 45 days and therefore only covers the labour market strength until the start of October. Upon closer inspection the rise in the claimant count change - which is a fairer representation of the current environment as this data point covers the period until the end of last month - takes the shine off the good news at the very least and possibly even usurps it. In rising to 9.8k, this indicator came in at its highest level since November 2012 and when you also consider the upward revision of the prior print (to 5.6k from 0.7k) this could be taken as a warning sign that everything may not be quite as rosy as it appears for the labour market.
Rolls Royce (LON:RR) falls after earnings guidance
The worst performing stock on the leading benchmark in London is Rolls Royce which has fallen by more than 4% after stating that the wider market outlook is mixed. The British jet engine maker has recovered from a string of profit warnings in recent times and expects its cost savings to be at the top end of a £150-200m range but nonetheless the cautious forecast going forward has been met with trepidation in the market. At the top of the index are Johnson Matthey (LON:JMAT), Severn Trent (LON:SVT) and Prudential (LON:PRU) with all three rising by well over 1% so far.