There was a small increase in the number of permanent staff appointments during February, according to a new report.
However, researchers from KPMG and the Recruitment and Employment Confederation (REC) also discovered much stronger growth in the level of demand for temporary staff.
That fact, coupled with salary inflation reaching a 30-month low, convinced KPMG's Alan Nolan that the labour market is softening.
He explained that the financial market crisis is already affecting city jobs and warned that the impact could soon spread to other parts of the economy.
"No matter what sector, employers are becoming increasingly cautious about the outlook," said Mr Nolan.
"Demand for staff is slowing and employers are hedging their bets with more emphasis on temporary hires, while pay pressures are easing somewhat."
Helen Reynolds of the REC added that the country is unlikely to experience the scale of job losses that followed the dotcom crash of 2001.
News that wage inflation is falling comes just days after a report by Badenoch and Clark revealed that
accountants' salaries rose by an average of 3.7 per cent during 2007.
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