Vacancies advertised online in Britain continued to decline in December and the pace at which advertised salaries were rising slowed, according to a survey published on Monday that reinforced evidence of a cooling labour market.
Online jobs portal Adzuna reported that vacancies fell from 745,448 in November to 716,791 in December. That represents a 15% reduction compared with the same month a year earlier and marks the weakest full year for advertised roles since 2020, when the COVID-19 pandemic struck. The December reading was the sixth month in a row to record a fall.
The Adzuna release said the broader pattern aligned with other indicators pointing to a deteriorating jobs market, even as there are tentative signs of renewed activity among businesses and consumers.
"Competition for roles intensified and hiring slowed across many of the UK’s largest sectors as the usual year-end uplift failed to materialise,"
Adzuna co-founder Andrew Hunter said in the survey commentary. He added there were signs of improvement in graduate and entry-level vacancies, calling these early recoveries potential "green shoots" for the year ahead.
Adzuna's data showed the average advertised salary was 6.8% higher than a year earlier in December, after a 7.7% rise in November. The moderation in advertised pay growth formed part of the picture policymakers are watching closely.
Bank of England officials are paying close attention to developments in the jobs market and trends in wage growth as they assess underlying inflation pressures. Those readings are an important input when considering the possible timing and scale of future interest rate moves, including the extent to which repeated rate cuts this year might be feasible.
A separate survey from the Confederation of British Industry offered a mixed snapshot of business sentiment. The CBI's indicator for expected growth over the next three months improved to -20 from -30 in December, while its gauge of activity for the past three months was little changed and remained deeply negative.
"While there are tentative signs of stabilisation and resilience in some specific areas, the big picture remains similar to much of last year: businesses remain cautious, households are downtrading and confidence is still fragile,"
said Alpesh Paleja, deputy chief economist at the CBI.
Overall, the surveys together portray a labour market that has softened after a period of tighter conditions, with falling vacancy counts and slower advertised pay growth. At the same time, there are narrow areas of early recovery that market watchers note with interest, even as business activity readings remain subdued.
Summary
December's Adzuna data showed another monthly decline in online vacancies to 716,791 from 745,448 in November, a 15% year-on-year fall and the sixth straight monthly drop. Advertised pay growth slowed to 6.8% year-on-year after a 7.7% gain in November. The CBI survey registered an improvement in near-term growth expectations but little change in recent activity, which stayed deeply negative. Bank of England policymakers continue to monitor labour and wage trends as they consider inflation pressures and the potential for future interest rate adjustments.
Key points
- Adzuna reported vacancies fell from 745,448 in November to 716,791 in December, marking six consecutive months of decline and a 15% drop from a year earlier.
- Average advertised salaries rose 6.8% year-on-year in December, down from a 7.7% rise in November.
- CBI sentiment data showed its growth indicator for the next three months improved to -20 from -30, while activity over the past three months remained deeply negative; Bank of England policymakers are watching these labour and wage signals closely.
Risks and uncertainties
- Persistently falling vacancy numbers may signal ongoing weakness in the labour market, which could affect consumer spending and business hiring decisions.
- Slower growth in advertised pay could reduce inflationary pressure but also weigh on household incomes and demand.
- Uncertainty in business activity, as reflected in the CBI's deeply negative recent-activity gauge, leaves prospects for broad economic recovery fragile and could influence monetary policy decisions.