RX2 Solutions Q4 2024 Hiring & Economic Outlook
As we head into Q4 during an election year, we are seeing more companies than ever take a wait and see approach to their hiring. This past summer was one of the slowest ones in recent memory due the summer typically being slow due to vacations and interviewers being away, the pending interest rate reduction (which recently happened), and the upcoming elections in November. We have seen an increase in hiring demand since Summer vacation wrapped up and believe that demand will continue to increase as we head towards 2025. Currently, we are seeing that it’s a buyer’s market with a lot of good talent out there that isn’t usually looking for a new role. If you are thinking of making a hire, now may be a good time to pick up that A-level player, before the pendulum swings the other way and it becomes a seller’s market again.
When it comes to the statistics, we have seen an increase in unemployment along with an increase in labor participation rate and a decrease in the number of jobs available. Labor participation rate for people between 25-54 came close to an all time high of 83.9% in Aug 2024i. Unemployment is up almost .4% year over year with 6.3M unemployed in Aug 2023 and 7.1M in Aug 2024, 4.2%ii. For reference, any unemployment number under 5% is considered “full employment”, meaning that there will always be a percentage of the market that is looking for workiii. When it comes to job openings, the current 7.67M is significantly down from the 11M at the height of the Pandemic but is still above the average of 6M openings that we saw before the Pandemiciv. The cut to interest rates should incentivize companies to borrow money for their projects that should lead to an increase in hiring as we approach the New Yearv.
Our bold prediction is that hiring will continue to increase until January or so at a fairly slow pace. Once the election is over and we’ve gone through the transfer of power, hiring will accelerate. This will happen because companies will have a good idea of what to expect from the new administration and can plan accordingly. That along with the Fed saying that they want to continue to drop interest rates to around 2.75-3.0 by 2026vi should kickstart hiring.
If you’d like to discuss your hiring strategy with RX2 Solutions and how we can play a part in it, feel free to reach out – info@rx2solutions.com, 610.240.3490.
References:
i https://www.bls.gov/web/empsit/cpseea08b.htm
ii https://www.bls.gov/news.release/pdf/empsit.pdf
iii https://www.investopedia.com/terms/f/fullemployment.asp
iv https://www.bls.gov/news.release/jolts.nr0.htm
v https://apnews.com/article/federal-reserve-interest-rates-loans-consumers-borrowing-6127436dd3e6d8af48825aca6d3a7715
vi https://www.bondsavvy.com/fixed-income-investments-blog/fed-dot-plot