The UK labour market showed a significant improvement last month, bouncing back from its pre-Christmas slump, according to data from the Recruitment and Employment Confederation (REC).

The REC’s Report on Jobs, compiled from recruitment consultancy data and produced with KPMG, found that growth in both permanent and temporary staff placements in January was at its highest level since last summer, and demand for staff also grew at its best rate since June.

January represented a significant improvement from December, where job postings were down overall, and reduces the threat that the labour market is about to go into reverse. Once seasonal adjustment is taken into account, the data shows that October was the lowest point for the labour market since the end of the recession, but that there has been moderate growth in recruitment since then.

Quoted on the CIPD website, REC chief executive Kevin Green said: “As anticipated, this month’s Report on Jobs shows that economic activity accelerated in January with employers increasing their hiring, albeit not in large numbers. Employer confidence, which up until now has been fragile, is finally starting to harden. This is promising news but there is still a job to be done to ensure that all of society benefits from this renewed optimism.

“The issue that must now top the government’s agenda is how we get the one million young people that are either jobless or not in education into work. While the upcoming Work Programme will focus on the long-term unemployed and those on incapacity benefit, the government will still need to either incentivise SMEs to take on young people, or to provide more career and job-search support to those looking for work.”

Bernard Brown, partner and head of business services at KPMG, added: “The latest figures are encouraging. Employers across all sectors have been expanding their workforce in January, with no real pressure building on wage inflation. Importantly, there was a real bounce from the previous month’s figures for blue collar, engineering and IT-related jobs. However, it is too early to speculate whether these are the signs of a private sector-led recovery. With looming public-sector job cuts, the VAT rise and slowing economic growth, the UK jobs market is likely to remain volatile over the coming months.”