UK hiring rebounds as US payrolls surge, Fed odds rise

UK permanent placements rose to 50.5 in August from 50.0 in July, according to the Recruitment and Employment Confederation and KPMG. That is the first reading above the expansion threshold of 50 since September 2022.

Temporary billings expanded at their second-fastest pace in more than three years. Vacancies continued to fall but at a slower rate. Candidate availability rose at its fastest pace in three months, partly due to redundancies, and starting salaries for permanent roles recorded their largest increase since January.

U.S. employers added 162,000 jobs in August, according to the government payroll report, well above the roughly 65,000 jobs economists had forecast. The unemployment rate held at 4.1%.

Average hourly earnings rose 3.1% year-over-year, the slowest annual pace in five years. Payroll gains in August were spread across a wider set of industries.

U.S. equity markets pulled back after the jobs data: the S&P 500 fell as much as 0.4% and the Dow Jones Industrial Average dropped over 260 points before trimming losses. Bitcoin rose above $80,000 before the report and later fell about 3.5% to roughly $78,649. The CME Group’s FedWatch tool moved to price a near 60% chance of a rate increase at the Federal Reserve’s Sept. 16 meeting.

The Federal Reserve will announce its decision on Sept. 16. If policymakers raise interest rates, the change would coincide with early signs of hiring improvement in the UK.

Both the UK and U.S. labour reports provide recent data points for central banks and market participants assessing near-term monetary policy.