For the 42nd consecutive month, U.S. nonfarm payrolls increased, continuing a healthy gain of 206,000 in June, as reported by the Bureau of Labor Statistics. The overall gains were led by government (70,000), healthcare (49,000), social assistance (34,000), and construction (27,000).
“When you look past the headlines and examine just how resilient the job market is in 2024, healthcare, social assistance, and government account for 60% of all job gains. Healthcare labor demand continues to advance due to aftereffects of the pandemic and an aging population. Given these conditions, healthcare roles are expected to continue to increase and lead US job growth in 2024,” said Recruitics CEO, Adam Stafford.
Meanwhile, unemployment peaked for the third month and now sits at 4.1 percent. Overall, unemployment has experienced a steady uptick since sitting at 3.6 percent just a year prior and has now exceeded 4 percent for the first time since November 2021. The unemployment rate measures the number of people actively seeking employment but unable to secure it. In previous reports since the beginning of the Coronavirus pandemic, this rate has sometimes been misleading as many people opted out of the labor force to care for family members, continue their education, or otherwise take on responsibilities that precluded them from seeking work.
While the overall labor participation rate now sits 0.7 percentage points below the pre-pandemic baseline of 63.3 percent, the prime age (25-54 years) labor force participation rate has reached 83.7 percent, the highest since February 2002.
With higher rates of prime labor force participation and unemployment, finding a job is not as easy as it was last year.
While many Americans continue to feel the pressure of high interest rates, inflation, shrinking savings, and growing debt, consumer spending has decreased across retail, food service, and recreation. According to ING’s chief international economist, James Knightley, American spending on transportation (air travel and cruises), recreation, food, and finance was linked to the top 20% of earners. In comparison, a more significant portion of spending on healthcare services was aligned to the bottom 60% of households by income.
“Retail hiring is currently facing economic uncertainty. In 2023, we saw less than stellar seasonal demand and we expect that trend to continue in 2024. Across retail, we anticipate earlier surges in job growth this year followed by a curtailment in the seasonal, end-of-year hiring spree,” said Recruitics CEO, Adam Stafford.
In turn, there has also been an observed decrease in hiring power within the service sector.
According to CNN, service-providing businesses have added 30% fewer jobs, on average, per month between April and June this year (168,000 jobs per month) as compared to January through March (241,000 jobs per month). In contrast, in 2023, the services industry posted average monthly gains of 228,000 jobs. Hiring trends vary within the services sector, representing a significant portion of the job market.
While job seekers started 2024 with heightened confidence in their ability to find and secure employment, there was a notable drop between April and June, according to Vaco’s Talent Pulse report. 35% of Vaco’s over 2,000 survey respondents in Q2 expressed extreme confidence to secure and maintain employment, down eight percent from Q1. Similarly, there was a 6% increase, from 27% to 33%, in respondents who were not confident in securing and maintaining employment.
Meanwhile, ADP Research Institute’s Employee Motivation and Commitment Index tracks how people think and feel about their jobs and employers each month. In June, the index rose to a new peak of 138, the single largest one-month spike since 2021. This real-time measure of worker allegiance indicates that, in general, workers are more dedicated to their roles. This correlation certainly makes sense as workers feel less confident in seeking new employment and thus are digging their heels in at their current roles.
Regarding sector-specific callouts, nearly all sectors saw an increase in sentiment in June, except real estate, which experienced a notable decline this year, with standard realtor commission rates called into question. Education services saw a large jump to 152, up 44 points over May - some of which is attributed to solid job gains and the other seasonal variable aligned to schools letting out for summer. Additional sectors with month-over-month gains of over 25 points were professional, scientific, and technical services, and health care and social assistance.
The Recruitics Talent Market Index™ tracks the fluctuating price of attracting talent through paid advertising across a diverse range of media channels. These prices are indicative of the competitiveness in marketplace environments where employers vie for the attention of top talent.
June marks the fifth consecutive month of increased competition in the battle for talent in aggregate across all industries since the start of 2024. While job seekers are reporting greater perceived difficulty to find a new role, employers are increasing spend in 2024 to address hiring needs. Warehouse employers, on the other hand, are seeing a plateau since an increase at the start of the year.
As of the end of June, average hourly earnings increased 3.86 percent over the previous year, which has only continued to moderate since its peak at nearly 6 percent year-on-year growth in March 2022. With inflation also moderating downward and a more competitive job seeker market, employers are not paying out such aggressive compensation packages as they were over the last two years to secure talent.
According to The New York Times, these signals indicate a job market that may be close to cooling more dramatically. Since the consumer price index peaked in early 2022, the Fed has focused on increasing interest rates to slow price growth, all while aiming to keep a strong labor market. Now that inflation is cooling more rapidly, central bankers are focused on maintaining that strength.
Economists have speculated that a rate cut may come in September, and the June BLS jobs report only solidified those predictions. According to The New York Times, two quarter-point cuts are now fully priced in this year.
Warehousing and storage sector roles posted a net gain of 5,600 payrolls over the past three months but a net loss of 2,300 payrolls in June. Jobs posted by employers in June for warehouse workers, warehouse associates, material handlers, forklift operators and forklift drivers were down by a combined 19% year-on-year.
The number of people actively searching for warehouse worker and general laborer roles was down by a more drastic rate of 40% in June, according to Indeed, with just under 2 million people searching, as compared to over 3.3 million during the same month last year. On the bright side for employers, the average number of job seekers per job posted was up by 16% over the same period.
In terms of the advertising competitor landscape, below is a chart illustrating the top 10 employers by clicks nationwide on Indeed for warehouse workers from May 2023 to June 2024, as well as the active job seeker click share that each garnered per month.
In 2023, Amazon held significant dominance with the number one position by a wide margin, but the giant has pulled back on their job board investment, falling out of the top 10 in all of 2024 thus far. With this change, the top 10 employers are also garnering a lower overall market share.
Source: Indeed Hiring Insights, Warehouse Workers, Nationwide, May 2023-June 2024
Like many other industries, the logistics industry has been impacted by an aging workforce, with nearly half of the US population projected to be over the age of 40 by 2040. With the influx in warehouse hiring during the course of the pandemic, workplace injuries in warehouse settings increased substantially. Now, with the emergence of technology and smart warehouse facilities, employers are able to address worker concerns about safety, physical strain, and technological upskilling -- all of which lead to greater retention and worker loyalty.
Based on a survey by Lucas Systems, workers care so much about advanced warehouse technology that 74% are willing to trade pay for better tech to do their jobs.
Remote and hybrid work, another major trend in worker preference during and following the pandemic, is also becoming possible through advancements in VR technology. This tech allows warehouse managers to virtually check inventory, and also allows workers to virtually participate in safety training as opposed to learning entirely in the physical setting where injury is a more likely consequence of an error. Robotics is another leading advancement addressing ergonomic and safety concerns in the workplace.
Employers can differentiate themselves by highlighting the technology in their facilities that show workers that companies are prioritizing investing in their people, and care about their health, safety, advancement and happiness.
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Staying on top of the labor market is essential when creating and pivoting recruitment strategies. The talent acquisition experts at Recruitics are here to help you navigate any market condition. We utilize real-time data to pivot, innovate, and collaborate, aiming to make your approach more precise, intuitive, and efficient. Contact us today!
