REC data points to stabilising pay growth despite weak hiring

The latest REC Report on Jobs indicates that wage growth is stabilising despite continued weakness in hiring, adding to a growing body of evidence that earnings pressures remain stubborn even as employment softens.

The permanent staff placements index edged up to 45.5 in November from 45.2 in October, remaining below the 50 no-change mark.

The permanent staff availability index rose to 66.6, up from 65.1, and far above its 38.0 average in the second half of the 2010s, underscoring how candidate availability has surged as hiring demand has cooled.

At the same time, the permanent staff salaries index increased to 52.7 in November from 50.8 in October.

While that remains well below its 60.0 average of the late 2010s, the latest rise points to pay pressures that are proving more persistent than many expected.

The figures challenge the much weaker signals from other November jobs indicators, including the pronounced decline recorded in the Decision Maker Panel and the sharp fall in the PMI employment balance.

Analysts note that the timing of survey sampling appears to have influenced the divergence: the REC data was collected from 12th to 24th November, capturing both the volatility around Chancellor Reeves’ decision to abandon income tax rises on 14th November and the subsequent signs that businesses would escape offsetting tax increases.

Based on historical relationships, the REC survey still points to a modest 6,000 month-to-month fall in private sector payrolls in November.