The latest Bank of Scotland Labour Market Barometer - a composite indicator designed to provide a single figure snapshot of conditions - showed a reading of 60.5, ahead of the 58.5 for the UK as a whole.
In a study where a figure greater than 50 suggests expansion, the Scottish July number was the highest since September 2007 and up on the 58.5 in June.
The report said: "The improvement in Scotland's labour market corresponded with a similar marked rise for the UK as a whole.
"The equivalent UK index posted 58.5 in July, up from 55.4 in June, and signalled the strongest improvement since October 2007."
It was the fifth month in succession the Scottish barometer has risen. Separately, the bank's Report on Jobs saw the sharpest rise in permanent placements in the ten-and-a-half years it has been running during July.
The report suggested this was the result of more activity in the jobs market and higher demand from employers alongside a more modest increase in temporary staff positions.
Donald MacRae, chief economist at Bank of Scotland, said the stronger figures in both reports give an indication of improving conditions.
He said: "July's Barometer rose to its highest level since September 2007. The number of people appointed to permanent jobs rose markedly while the number of vacancies for both permanent and temporary jobs increased strongly.
"Vacancy growth was marked in the engineering and construction sector. These results suggest rising business confidence is translating into a continuation of the recovery in the Scottish economy this summer."
Recruiters in Aberdeen saw the strongest rises in permanent and temporary staff placements.
Availability of permanent staff dropped by the greatest extent in Glasgow, with availability of people for permanent roles across the whole of Scotland dropping at its fastest rate in six years.
The fastest rates of salary inflation for permanent roles was seen in Edinburgh.
Seven of the eight industry sectors monitored show a rise in demand for permanent staff led by IT and computing, nursing, medical and care and accounting and finance.
Only blue collar roles saw a drop during July.
For temporary roles it was the executive and professional sector which showed less positions available with the rate of decline the steepest since September 2009.
All other sectors had larger numbers of temporary posts available with nursing, medical and care leading the way.