Key Points:
- UK job postings have continued to gradually decline in recent weeks.
- Wage growth has continued to steadily ease, though remains strong.
- There remain few signs of any looming spike in layoffs.
Our Labour Market Updates examine important trends using Indeed and other labour market data. Our European Labour Market Overview chartbook provides a more comprehensive view of the European labour market. Other data, including the Indeed Wage Tracker, are regularly updated and can be accessed on our data portal.
The UK labour market has continued to cool in recent weeks. However, there is little sign of any accelerated weakening of the jobs market immediately following the recently implemented hike in employer National Insurance contributions and rise in the minimum wage. At the same time, tariff-related global uncertainty doesn’t seem to have knocked things off course. Instead, hiring appetite has continued to gradually soften while job losses have remained modest.
Job postings have continued to gradually soften
UK job postings have continued to drift down in recent weeks and as of 9 May stood 22% below their 1 February 2020 pre-pandemic baseline. Postings declined 3.8% over the past month, though there was a modest improvement in the latest week’s data.
Hiring appetite continues to face several headwinds, including tariffs-related uncertainty (despite the US-UK trade agreement), questions around the shape of the proposed Employment Rights Bill and the policy-driven rise in employer costs having gone into effect in April. The combination of these factors has helped drive measures of employer confidence to record lows.
But the trajectory of job postings hasn’t significantly changed of late. Rather, postings have maintained their steady pace of descent. The UK economy grew more than expected in Q1, which may have helped provide some momentum for labour demand to ride out turbulence. However, survey data suggests growth will likely have slowed in the current quarter.
Office for National Statistics (ONS) data also point to a job market that isn’t showing dramatic signs of weakening, with payroll-based employment having declined only moderately in recent months.
Wage growth continues to gradually ease, but remains strong
Posted wage growth continues to gradually ease. The Indeed Wage Tracker showed that wage growth was 5.6% year-on-year in the three months to April, its lowest in three years and down from a peak of 7.5% back in 2023. However, it remains well above equivalent measures for the euro area (3.0%) and the US (3.2%).
ONS figures show a similar picture, with regular pay growth running at 5.6% in the three months to March. That’s still stronger than the Bank of England would like to see and – combined with persistent services inflation – is reflected in the Bank’s continued caution over further interest rate cuts following May’s 25 basis points reduction to 4.25%.
Redundancy notifications remain low
There is still little sign that employers intend to enact widespread job cuts. The number of potential redundancies notified to the government (employers are required to do this when planning 20 or more redundancies) has not materially risen in recent months.
Conclusion
The UK labour market has continued to soften, but appears to have taken recent turbulence largely in stride rather than showing any dramatic worsening. Layoffs have remained low, though subdued hiring appetite means it’s a challenging environment for new labour market entrants or people currently out of work. Market conditions suggest wage growth will continue to gradually ease over coming months, giving room for further interest rate reductions to support the economy.
Hiring Lab Data
Job postings data is available on our Data Portal. We also host the underlying job-postings chart data on GitHub as downloadable CSV files. Typically, it will be updated with the latest data one day after this blog post is published.
Methodology
Data on seasonally adjusted Indeed job postings are an index of the number of seasonally adjusted job postings on a given day, using a seven-day trailing average. Feb. 1, 2020, is our pre-pandemic baseline, so the index is set to 100 on that day. We seasonally adjust each series based on historical patterns in 2017, 2018, and 2019. We adopted this methodology in January 2021.
To calculate the average rate of wage growth, we follow an approach similar to the Atlanta Fed US Wage Growth Tracker, but we track jobs, not individuals. We begin by calculating the median posted wage for each country, month, job title, region and salary type (hourly, monthly or annual). Within each country, we then calculate year-on-year wage growth for each job title-region-salary type combination, generating a monthly distribution. Our monthly measure of wage growth for the country is the median of that distribution.
The number of job postings on Indeed.com, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit’s HR Technology segment.
