Labor Market Trends in 2024

In Q1 2024, the highly reputable ITR Economics unveiled its latest forecast on U.S. private-sector employment. This forecast, which we are about to delve into, holds significant implications for the future of the labor market. 

1. Despite the projected industrial downturn, the U.S. private-sector employment has shown remarkable resilience. Particularly, the service and consumer sectors have stood strong, offsetting the weakness in industries like manufacturing. These sectors, with their potential for growth, can effectively utilize downturns in other industries and corporate layoffs, thereby expanding the pool of available candidates in 2024. 

2. Wages are still inflated across the country. With the tight labor market, wages are generally elevated across the country, with most states being in the 3-5.5% range for wage elevation. However, the standout performer is Texas, which saw wage growth of 6.2% in 2023 and is projected to increase by 4.2% in 2024. This is a promising trend that indicates the state's strong economic conditions.

3. The labor market remains highly competitive. As of March 2024, the United States has only 0.7 individuals available for every job opening, a significant drop from the four unemployed individuals per job opening in 2020. However, this is only marginally different from the 0.6 individuals available per job opening in 2023. The number of job openings has stayed relatively steady, decreasing only slightly from 8.75 million in February to 8.5 million in March. With the number of jobs surpassing the number of available candidates, the search for top-quality hires continues to be a challenge. 

4. Weakening economic conditions means employees become more likely to stay. Although the projected upcoming recession is expected to be mild and may not affect every market, the possibility of a recession and global unrest may make employees less inclined to search for new job opportunities during times of uncertainty. This lack of career change further increases the tightness in the labor market in the foreseeable future.

5. Automation, innovation, and strategic hiring will be pivotal in harnessing future growth. With projected growth in 2025 and 2026, companies that proactively implement systems and efficiencies now will be best positioned to capitalize on this upswing. Employers should identify potential growth markets, recruit top talent, provide necessary training, and be ready to seize opportunities when growth accelerates in the second half of the decade. 

With engaged and retained search options and hiring strategy consulting services, My People Person can help your team navigate these challenges and come out on top in 2024.