UK Jobs Rebound Meets Hot US Data: More Fuel for a Fed Rate Hike?

UK permanent job placements rose for the first time since September 2022, arriving a few days after a stronger-than-expected US jobs report pushed Federal Reserve rate hike bets sharply higher.

The overlap gives investors a rare side-by-side read on two major economies at once. British hiring is showing its first real signs of a turn, even as US data complicates the Fed’s rate path.

UK Recruiters See a Genuine Turn

The Recruitment and Employment Confederation (REC), a UK trade body for staffing firms, and accountancy firm KPMG track permanent placements each month. Their index rose to 50.5 in August from July’s flat reading of 50.0, the first print above the no-change line in nearly four years.

Temporary billings grew at their second-fastest pace in more than three years.

Vacancies kept falling, though at the second-weakest rate of decline in almost two years, while candidate availability rose at its fastest pace in three months, partly on redundancies. Starting salaries for permanent roles grew by the most since January.

US Data Complicates the Fed’s September Decision

Across the Atlantic, US employers added 162,000 jobs in August, more than double the 65,000 economists expected, while unemployment held at 4.1%.

Wage growth slowed to an annual 3.1%, a five-year low, even as gains broadened across more industries.

The surprise strength tested the market calm that followed the Fed’s Waller rate signal earlier in the week. US stocks pulled back, with the S&P 500 slipping as much as 0.4% and the Dow Jones Industrial Average falling more than 260 points before paring some losses.

Odds of a hike at the Fed’s next meeting, tracked by the CME’s FedWatch tool, a gauge of futures-implied rate-move odds, jumped to just under 60%.

Bitcoin (BTC) felt the same jolt. The token had pushed above $80,000 before the report landed, then dropped as much as 3.5% to $78,649 once it did.

The Fed’s rate decision is due September 16. If it hikes, tighter policy would land on both sides of the Atlantic at once, testing whether Britain’s fragile hiring recovery and Wall Street’s rate-sensitive rally can withstand the same squeeze.