Britain’s red-hot labor market showed signs of loosening with recruiters reporting a strong jump in the number of people looking for work and a drop in demand for staff.
(Bloomberg) — Britain’s red-hot labor market showed signs of loosening with recruiters reporting a strong jump in the number of people looking for work and a drop in demand for staff.
The Recruitment and Employment Confederation said Monday its measure of total staff availability rose to 61.4 last month. That was the strongest it’s been since 2009, except for the period around the pandemic. Demand for permanent staff fell to the lowest in almost three years.
The figures add to evidence that a slowdown in the economy may be starting to cool upward pressure on prices coming from the labor market. The Bank of England is concerned that soaring wages are feeding inflation after workers dropped out of the jobs market in the pandemic. REC said those trends are starting to reverse.
“Recruiters told us that their clients aren’t yet confident enough in the economic outlook to commit to permanent hires,” said Claire Warnes, a partner at KPMG, which contributed to the survey. “Businesses are also freezing hiring, with some redundancies.”
What Bloomberg Economics Says …
“The signal from July’s REC survey — a good bellwether for both the official employment and wages data — is that the jobs market is loosening and pay growth is easing. If the survey proves accurate, it would raise the risk the central bank pauses in November, one meeting earlier than our current baseline.”
—Dan Hanson, Bloomberg Economics
- Wages for permanent staff continued to grow strongly, registering 58.3 on REC’s index, about the same as June’s 58.3 figure.
- “The jobs market overall remains fairly robust, with vacancies and pay still rising and unemployment low,” said Neil Carberry, chief executive officer of REC. “Hiring overall is still at a good level, and some sectors remain under pressure from significant labor shortages.”
(Updates with chart and BI comment)
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