Good morning!
Indeed’s Hiring Lab released its 2024 jobs and hiring trends report this morning, examining changes in job postings, labor force participation, quit rates, wage growth, and generative AI in 2023 and what they could mean for 2024. Overall, the U.S. saw positive labor trends this year, such as lower quits and strong workforce participation rates. But it’s still too early to be confident that 2024 will follow the same path.
“There’s a case for optimism for 2024, but it’s best not to oversell it,” writes Nick Bunker, economic research director for North America at Indeed Hiring Lab and the report’s author.
Below are the five trends outlined in the report:
Demand for workers is cooling
The Indeed Job Postings Index, which tracks the percent change in job postings, is down 22.5% from its late December 2021 peak.
“High remote” sectors, those with the strongest concentration of remote roles, saw the steepest decline in job postings, such as software development (down 51.3%), information design and documentation (down 44.3%), and mathematics (down 40.1%). Sectors providing in-person services, such as restaurants, hotels, and hospitals, saw continued hiring demand, up 3.1% since mid-June 2023.
Despite hiring for fewer new positions, employers are also holding onto their current staff, Indeed found. Layoffs remain historically low—the September 2023 layoff rate was 1%, lower than the lowest pre-pandemic rate.
How next year's labor market will fare depends on whether demand for workers continues to fall, the report warns. Gradual cooling demand for new hires could prevent a spike in unemployment, but a rapid decrease could cause unemployment to rise as people struggle to find jobs.
Aging population may stunt labor force participation
The U.S. labor force grew by an average of 276,000 people per month through the first 10 months of 2023, well over the average of 131,000 workers in the three years before the pandemic. The workforce participation rate of prime-age workers (aged 25 to 54) rose to levels unseen in 20 years, currently at 83.3% as of October. Part of this boost is due to a rebound in immigration; roughly a quarter of labor force growth in the last year was from foreign-born workers.
Still, more baby boomers are exiting the workforce than expected. Despite the increase in prime-age workers, this aging population will likely cause the participation rate to fall and create an even more limited labor supply.
Workers are still quitting
2023 apparently marked the end of the “Great Resignation.” Quit rates were at 2.3% in September, matching the average rate in 2019. But, as the Bureau of Labor Statistics noted in June 2020, the quit rates in 2019 were still high compared to the previous 20 years.