UK permanent job placements rose in August for the first time since September 2022, according to data from the Recruitment and Employment Confederation and KPMG. The index reached 50.5, marking the first reading above the no-change line in nearly four years.
The hiring improvement came as the US reported stronger-than-expected employment gains, with employers adding 162,000 jobs in August—more than double the 65,000 economists had forecast. US unemployment remained at 4.1% while wage growth slowed to an annual 3.1%, a five-year low.
UK Labour Market Signals
Temporary billings in the UK grew at their second-fastest pace in more than three years. Vacancies continued to decline, though at the second-weakest rate of decline in almost two years. Candidate availability rose at its fastest pace in three months, partly driven by redundancies. Starting salaries for permanent roles grew by their largest amount since January.
Market Impact and Rate Expectations
The stronger US jobs data reshaped market expectations for the Federal Reserve's next decision. Odds of a rate hike at the Fed's September meeting, tracked by the CME's FedWatch tool, jumped to just under 60%. US equities pulled back following the report, with the S&P 500 slipping as much as 0.4% and the Dow Jones Industrial Average falling more than 260 points before recovering some losses.
The Fed's rate decision is scheduled for September 16. A hike would tighten policy on both sides of the Atlantic simultaneously, testing whether the UK's nascent hiring recovery and US equity markets can withstand synchronized rate increases.
