Because of inflation, hiring is projected to be moderate in 2024. The US labor market outlook for the year appears stabilized and normalized after pandemic-related volatility.
A recession appears unlikely, inflation is trending down, and the labor market generally is holding steady. Job gains are expected to be moderate, unemployment should slightly increase, and wages should slightly decrease.
Learn why hiring is projected to be moderate this year due to inflation.
Lessening Chance of a Recession Should Mean Low Unemployment
Many economists believe the odds of a recession are much lower now than a year ago. Because of a strong labor market, consumer spending helped prevent a recession in 2023.
Since this momentum is expected to continue this year, the unemployment rate should remain relatively low, and layoffs and inflation should maintain their current trends. These factors reduce the likelihood of a recession this year.
Slowing Economic Growth Means Hiring Should Be Moderate
Employment growth should be at a slower rate in 2024 than in recent years. Hiring and job gains are expected to look a lot like the second half of last year. Most companies will focus on filling existing roles rather than adding new roles.
Due to slowing economic growth, shifting consumer demand, and higher interest rates, many employers are rethinking their staffing plans. Tight labor markets and increasing demand for skilled talent continue to make hiring in many industries difficult. As a result, many companies are transforming their business models and focusing on employee retention.
Lower Economic Gains Mean Unemployment Should Remain Low
Although unemployment and layoffs might slightly increase in 2024, the rates should remain relatively low. Because the current jobless rate is near a historic low, most companies likely will remain focused on retaining employees rather than adding new jobs.
If the need for new hires continues to decline at generally the same rate as last year, then the labor market should continue on its path without a noticeable increase in unemployment. Although job postings and openings are higher than historic norms, they remain lower than recent highs.
Reduced Economic Growth Means Wages Should Slightly Decline
Wages are expected to grow at a slower rate in 2024 than in the past 2 years. Many employers are awarding smaller pay increases due to decreasing employer demand, increasing labor supply, and increased retention.
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