The UK claimant change figure indicated a larger than expected jump in unemployment at 50.4K for May versus the consensus reading of 10.2K and the previous unemployment gain of 8.9K.
Meanwhile, the unemployment rate rose from 4.3% to 4.4% instead of stabilizing, reaching its highest level since October 2021.
However, the average earnings index showed stronger wage inflation of 5.9% for the three-month period ending in April, beating expectations of 5.7%.
Furthermore, the previous month's reading was upgraded from the initially reported increase of 5.7% to 5.9%, indicating stronger price pressures.
Link to an overview of the UK labor market
The number of job openings also fell, adding to signs that the job market may be softening. This represents nearly two years of consecutive monthly declines in job vacancies while the inactivity rate has risen.
Market reactions
British pound against major currencies: 5 minutes
Overlay of the British pound against the major currencies Chart by TradingView
The pound was slightly higher ahead of the UK jobs report, as traders may have been anticipating another potential bullish surprise for May.
However, the British currency took hits across the board as the report came in mixed. The much higher-than-expected change in the number of claimants, combined with the rise in the unemployment rate and decline in job vacancies, is likely to outweigh the positive surprise in wage growth.
But while the pound briefly gave up some of its gains against most of its forex counterparts, it managed to hold its ground against the Japanese yen. Shortly after, the British currency recovered the losses incurred after the jobs report and gradually crawled back into positive territory against its peers over the next few hours.
