September’s labor market data reveals a mixed but intriguing landscape. With job openings skyrocketing by 329,000 and nonfarm payrolls surging by 254,000, it’s clear that demand for workers remains robust. Yet, we also saw hiring pull back across several sectors, raising questions about the future of the labor market as we move into Q4.
Key Highlights from September 2024:
Job Openings surged to 8.04 million, beating economist forecasts, with significant gains in construction and government roles.
Hiring dipped by 99,000, primarily in retail, transportation, warehousing, manufacturing, and hospitality.
Layoffs fell by 105,000, with decreases in retail and healthcare but a slight uptick in business services.
Unemployment rate dropped to 4.1%, with a household employment survey showing a significant gain of 430,000 jobs.
Wages grew 0.4% month-over-month and 4% year-over-year, outpacing inflation and boosting consumer confidence.
Job Openings: A Demand Surge
August saw a dramatic rise in job openings, jumping to 8.04 million, well above forecasts of 7.66 million. Small businesses (10-49 employees) drove much of this increase, adding 203,000 more vacancies. However, this hiring gap wasn’t spread evenly across industries.
Construction stood out, with 138,000 new job openings, signaling a persistent need for labor in the building trades. Similarly, state and local government roles (excluding education) saw 78,000 unfilled positions, highlighting a continued demand for public-sector workers.
On the flip side, the "other services" category saw a sharp drop of 93,000 job openings. It’s a reminder that while certain sectors thrive, others are grappling with stagnation.
Takeaway for Employers: With job openings outpacing hires, it’s evident that businesses are struggling to find talent. If you’re in construction, public service, or a small business, now is the time to focus on retention strategies and consider expanding recruitment efforts beyond traditional methods. According to Kelly Brown, President of BGSF’s Property Management Division, “With job openings on the rise, particularly in sectors like construction and government, the property management industry is feeling the pressure to keep pace. Filling key roles, from maintenance technicians to leasing consultants, has never been more critical. Companies that invest in workforce development and prioritize employee retention will be best positioned to thrive in today’s competitive hiring landscape.”
Hiring Dips but Layoffs Decline
Despite the rise in openings, hires dropped by 99,000 to 5.317 million. This decline was particularly pronounced in retail, transportation, and hospitality, industries that usually see more fluid hiring patterns. For example, hotels, restaurants, and bars saw fewer hires—down 180,000 for businesses with 10-49 employees—perhaps a sign of labor shortages or a pullback in consumer spending.
While hiring slowed, layoffs decreased by 105,000, suggesting that employers are reluctant to lose workers even if they’re not bringing on new ones at the same pace. The only area where layoffs increased was professional and business services, signaling uncertainty in the white-collar sector.
Takeaway for Job Seekers: If you’re looking for work, this could be a strategic time to target sectors where hiring is slowing, but layoffs are low. Businesses in those areas may be under pressure to fill critical roles but aren’t willing to shed staff. Kelly Brown also added, “The latest jobs report tells us that while demand for workers is high, hiring remains a challenge, especially for small to mid-sized companies. In property management, this means taking a proactive approach—whether that’s offering more competitive pay, upskilling current staff, or streamlining hiring processes. We’re seeing the businesses that adapt quickly are the ones securing the talent they need.”
Quits and Long-Term Unemployment: A Shift in Dynamics
For the first time since August 2020, the number of resignations dropped significantly. Quits fell by 159,000 to 3.084 million, bringing the quits rate to a four-year low of 1.9%. This shift indicates that workers might be more hesitant to leave their current roles, which could relieve some of the wage pressure employers have been facing. However, long-term unemployment remains a concern. The average duration of unemployment rose to 22.6 weeks—the highest since 2022—with 1.6 million Americans being out of work for more than six months. This points to challenges for certain segments of the workforce in finding new roles, even as job openings increase.
Takeaway for Employers: Lower quits and rising long-term unemployment mean retention efforts are starting to pay off. If you’re struggling to hire, consider widening your candidate pool to include long-term unemployed individuals, who may bring valuable experience to your team.
Wages and Workweek: Solid Growth
September was also a strong month for wages. Average hourly earnings rose by 0.4% month-over-month and 4% year-over-year, both exceeding expectations. This reflects the continued tightness of the labor market in certain sectors, particularly in construction, healthcare, and leisure and hospitality. Interestingly, the average workweek dipped slightly to 34.2 hours, which could hint at productivity optimizations or adjustments in workload.
Takeaway for Job Seekers: Wage growth is accelerating in key industries. If you’re in a field like construction, healthcare, or hospitality, now is a great time to leverage that growth in salary negotiations.
Employment Outlook: Strong Growth in Key Sectors
Nonfarm payrolls came in much stronger than anticipated, adding 254,000 jobs in September, up from a revised 159,000 in August. Much of this growth was concentrated in leisure and hospitality, construction, and education and health services. In contrast, manufacturing and white-collar industries like finance and business services saw little to no new job creation, and even some declines.
Takeaway for Employers and Job Seekers: For employers in growth sectors, the battle for talent is intensifying, and competitive compensation is becoming crucial. Job seekers, particularly those in white-collar industries, may need to consider pivoting to sectors with stronger hiring momentum if opportunities in their current field dry up. According to Eric Peters, President of BGSF’s Professional Division, “With the quits rate hitting a four-year low, employers in the professional sector should shift their focus to retention. Keeping top talent engaged through career development, flexibility, and competitive compensation will be key as we continue to navigate this evolving job market. Executives should be having meaningful conversations about strategic initiatives for 2025 and discussing how employees will play a part in those initiatives”
BGSF’s Perspective
The September report highlights a resilient job market full of opportunities. Job openings are soaring, wage growth is outpacing inflation, and layoffs are on the decline. It’s clear that businesses are pushing forward, even as they face challenges in hiring. Beth Garvey, CEO of BGSF, is optimistic about what lies ahead: “We’re seeing incredible momentum in the labor market. Demand for talent remains high, and businesses that stay agile and prioritize both hiring and retention will be well-positioned for success. It’s an exciting time for employers and job seekers alike, and I’m confident that those who embrace these opportunities will thrive.”
As we approach the end of 2024, businesses should focus on tapping into the growing pool of talent and enhancing their workforce strategies. With openings on the rise and competition heating up, now is the time to act—and capitalize on the strength of today’s job market.
Contact BGSF
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