The labor market may be headed in the right direction, but there’s enough reason to be cautiously optimistic about the year ahead, according to Indeed’s 2024 US Jobs and Hiring Trends Report.
Indeed’s latest data analysis highlights five workforce trends that led to a surprisingly smooth 2023, and could create a similarly solid year in 2024 if the path remains clear.
1. Job postings coming down from pandemic heights
The number of job openings is still at an elevated level, but it’s steadily decreasing from recent highs as employment rises and companies fill more of their open roles. There was a 22.5% drop in Indeed’s Job Postings Index from December 2021’s peak, and job openings reported by the federal government in September were down 20.6% from the high levels of March 2022.
Some of the biggest year-over-year declines in job postings as of early November were in tech fields like software development (-51.3%) and IT operations and helpdesk (-33.5%). Notable drops in other sectors included human resources (-35.3%), banking and finance (-33.2%), and marketing (-32.7%). In addition, sectors that were more likely to advertise remote jobs experienced more significant decreases over the past year than those posting more in-person jobs, but these remote postings are actually returning to pre-pandemic numbers.
Other than a slight rise early this year, layoffs have stayed at or below the lowest pre-pandemic rate (1.2%). September 2023’s layoff rate was 1%.
2. Aging population may soon slow labor force participation
During the first 10 months of this year, the US labor force averaged a monthly gain of 276,000 people, a faster growth rate than in the first 10 months of both 2022 (+224,000) and 2021 (+98,000).
But how long this increased growth level will continue remains uncertain. Projections show that an aging population will gradually decrease the labor force participation rate, though an increase of more foreign workers and prime-age workers entering the workforce might offset this trend.
3. Job switching continues as the “Great Resignation” fades
While employees are no longer quitting at Great Resignation levels, the quits rate remains strong. September’s quits rate was 2.3%, dropping back down to 2019’s average rate, yet still much higher than historic levels. By industry, leisure and hospitality is still well above its pre-pandemic quits rate, while quitting in sectors like professional and business services and wholesale trade has dropped below pre-pandemic rates.
Indeed also found that many job seekers are looking for roles outside their current field, noting a significant increase in clicks to job postings outside current occupational groups for civil engineers (+8.9%), industrial engineers (+6.7%), and administrative assistants (+6.5%) since 2019.
4. Wage growth returning to its pre-pandemic pattern
Year-over-year wage growth is steadily slowing, falling to a rate of 4.2% in October according to the Indeed Wage Tracker. This is well below the January 2022 peak of 9.3% and near the pre-pandemic rate of 3%.
Indeed notes that an annual wage growth between 3.5% to 4% would be in line with 2% inflation, if the annual growth of labor productivity falls between 1.5% and 2%.
5. GenAI shows potential to reshape the labor market
Though time will tell what kind of long-term impacts generative AI and other technologies will have on the job market, there’s been a sharp increase in jobs containing GenAI terms. Only 0.003% of postings mentioned GenAI-related terms at the start of this year, and that percentage jumped to 0.06% by October’s end. This share accounts for not only jobs that create GenAI tools, but also jobs in which employees use such tools in their work.
See the full report for more labor market insights.
