KPMG-REC Report on Jobs: Only Modest Easing In Permanent Wage Growth

The KPMG-REC Report on Jobs showed "below trend" permanent pay growth in July whilst permanent placements fell for a second month. That said, the pace of permanent pay growth is still somewhat sticky and there continues to appear to be a skills mismatch despite staff availability rising again.

• Permanent staff placements declined again in July "extending the current downturn to nearly two years" due to "subdued demand", albeit by less then they did in June.
• Similarly, temporary placements also edged down slightly "as firms chose not to renew or replace expiring temporary contracts."
• Pay rates for permanent workers continued to rise on the month even if they did so by slightly less than in June. The press release notes this marked "below trend" pay growth although it's still the second highest index reading over the past five months.
• Further, it notes willingness to raise pay "to attract workers amid a dearth of suitable candidates".
• Temporary staff pay offered a notably softer backdrop, the weakest increase for nearly three and a half years (a "marginal" increase) attributed to "higher temp staff availability".
• Overall, this is a relatively mixed report for MPC members who are contemplating when to enact the second Bank Rate cut, but we place more emphasis on the persistence of permanent wage pressures.
• Data collected July 11 - July 25.