Key Points:
- UK job postings have continued to fall, and the rate of decline quickened in April.
- Wage growth is gradually easing, though remains strong.
- Even as hiring remains low, there are few signs of a significant spike in layoffs.
Our Labour Market Updates examine important trends using Indeed and other labour market data. You can download our most recent European Labour Market Overview chartbooks here. Other data, including the Indeed Wage Tracker, are regularly updated and can be accessed on our data portal.
The ongoing UK labour market cooldown gathered pace in recent weeks amid global economic uncertainty and a policy-driven increase in employment costs that came into force in April.
Job postings have slipped further
UK job postings have been falling fairly steadily for the past three-plus years, and the pace of decline accelerated in late April. As of 25 April, job postings were 23% below their 1 February 2020, pre-pandemic baseline. That’s down 25% year-on-year and 6% since 2 April, when the Trump administration’s ‘Liberation Day’ tariff announcements were made. The month-on-month rate of contraction in job postings is now the sharpest since early 2022.
The faster drop in job postings corresponds with signs that the spike in global economic uncertainty has started impacting UK business confidence and activity levels, reversing the positive growth momentum from the first quarter of the year. Tariff uncertainty comes at the same time as a rise in employment costs that took effect in April, driven by increases in employer National Insurance contributions and the minimum wage.
In contrast to the UK, job postings in peer economies across Europe and North America are at or above their pre-pandemic baseline, in some cases (notably southern Europe), substantially so.
Wage growth eases further, but still strong
The Indeed Wage Tracker indicates a gradual easing in UK posted wage growth in recent months, though it remains strong. UK posted wage growth was 5.8% year-on-year in the three months to March, its lowest in almost three years. However, it remains well above equivalent measures for the euro area (2.7%) and the US (3.1%). The single-month measure of UK wage growth dipped to 5.6%, its lowest since March 2022.
The wage gap disparity between UK low-wage categories and mid- and high-wage categories, which has been fairly pronounced throughout much of the post-pandemic period, has been narrowing in recent months. Wage growth remains highest in low-wage occupations, at 6.4% year-on-year, slightly above the 5.8% and 5.6% annual paces for mid-wage and high-wage occupations, respectively. While the National Living Wage increase of 6.7% that took effect in April will provide some near-term support for low-paid wage growth, cost pressures on businesses may limit their ability and willingness to raise pay more in coming months.
The ONS figures also point to easing (albeit elevated) regular wage growth at 5.9% in the three months to February. While robust wage growth remains a concern for the Bank of England from an inflation persistence perspective, those concerns may be increasingly outweighed by tariff-driven downside risks to the economy. The Bank is widely expected to cut interest rates from 4.5% to 4.25% on 8 May, and analysts will be closely watching for signs that policymakers may be shifting their rhetoric from a gradualist approach to a more aggressive stance on further rate reductions.
Still little sign of a material spike in job losses
While there have been concerns about a potential rise in layoffs as a result of higher employment costs and heightened uncertainty, there remains little sign of that in the current data. The number of potential redundancies notified to the government (employers are required to do this when planning 20 or more redundancies) has ticked up moderately but remains within its recent range.
With the unemployment rate remaining fairly low at 4.4% and official vacancies figures showing a continued steady decline, the labour market has maintained a gradual loosening in recent months. The ratio of unemployed people to vacancies — one measure of labour market tightness — now stands at 2, up from a low of 1 back in 2022. Though a little higher than where it was just before the pandemic, that remains below the long-term average of 2.8 observed since comparable data were first available in 2001.
Conclusion
The UK labour market continues to face considerable headwinds and has softened further in recent weeks, though that softening has primarily manifested as weaker demand for new hires rather than a substantial increase in job losses. Though that situation is probably preferable for the economy in the short term, it remains a challenging market for unemployed jobseekers or people looking to enter or re-enter the workforce.
Meanwhile, wage growth shows signs of a continued gradual easing, which could allow the Bank of England to ease monetary conditions faster should the economy need additional support later in the year.
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.
