September marked the 33rd consecutive month of job growth in the U.S., demonstrating the resilience of the labor market in the face of significant economic challenges. Notably, the U.S. unemployment rate remained steady at 3.8%, maintaining a streak of 24 consecutive months below the 4% threshold, a feat not seen since the 1960s. In spite of substantial economic obstacles, it seems that the job market is in a more favorable condition than economists anticipated, providing encouraging news for both employers and employees.
Yoh has conducted an in-depth examination of the Jobs Report data for Q3 2023, identifying key trends and insights that can inform hiring decisions for the short and long-term. Let's take a deeper look at the takeaways. Full analysis can be found in the Q3 Hire Analysis report.
RAPID ANALYSIS – Latest Jobs Report Shocks, Posts Biggest Gain Since January
After a few months of cooling jobs reports, many economists expected more of the same gradual slowdown to persist. What they received was a September jobs report that not only surpassed expectations but also marked the biggest job increase since January 2023. As September saw the U.S. add 336,000 new jobs - a 48% spike from the prior month of August.
RAPID ANALYSIS – Despite a Strong Jobs Report, Workforce Stress Remains High
There is no question that continued jobs gains is good news for American workers. However, the American workforce remains under tremendous economic stress, and more stress may be on the way. As the student loan payment pause comes to an end, the wages of many will not go as far as they did just one month ago. Consistently high interest rates are making homeownership more difficult and costly for new buyers and renters alike. And inflation, while slowing, still means that prices are much higher than they were this time a year ago. Jobs are plentiful but maintaining the American lifestyle is no easier for many.
INDUSTRY BREAKDOWN – The healthcare sector continues to drive significant job growth
The healthcare industry continues to be the main driver of job expansion, as the industry welcomed 262,500 new jobs in Q3 - a 1% gain compared to Q2. Ambulatory health services added more than 95,000 jobs; hospitals added more than 43,000 jobs; and nursing and residential care facilities added more than 45,000 jobs - contributing to the pervasive job growth across the industry. Whereas, other industries like finance, professional & business services, manufacturing, and data witnessed job stagnation - hovering just above 0% in terms of job growth. The information industry though experienced an especially difficult quarter, losing 45,000 jobs. Despite the difficult quarter, much of the job losses were driven by the motion picture industry, which was in the midst of a historic labor dispute.
TAKEAWAYS FOR EMPLOYERS – Despite Positive Numbers, There is Reason for Worry
While the picture for employers and employees alike may be rosy, many employed Americans feel quite differently about their job futures, according to a new survey from Yoh among employed Americans. Only 28% of employed Americans say they love their job and would not leave their company for any reason. In fact, nearly 1 in 7 employed Americans (14%) say they would like to leave their current job for a new one in the next 12 months.
Sentiment may be good now, but employers would be wise to take actions to ensure employees are satisfied in their current roles and remain loyal to their employers.
TAKEAWAYS FOR EMPLOYEES – Average Americans Still Feel the Financial Squeeze
Yet again, while a strong jobs report may be a sign of a robust economy, the average American still feels a tight squeeze on their wallet and would hardly say that the economy is working for them. High gas costs and increasing interest rates for credit cards and mortgages continue to hold employees back. And with another month of job gains, the hope that the Fed might shrink interest rates feels like a pipe dream. Employers should consider how the “economy” may have multiple different definitions depending on whether you ask Wall Street, the C-suite or the Average Joe walking down Main Street.
The 2023 Jobs Report for Q3 is a conundrum. Despite Q3 registering 799,000 new jobs - a 9% increase from Q2's job growth figures - areas of improvement still remain. Unemployment rates for minority groups continue to lag behind whites in job growth. Even with job growth, it appears employee confidence may be waning. For the second consecutive quarter of 2023, the Worker Confidence Interval fell, exhibiting a decline in employee's perception towards job security, promotion prospects, raises, and trust in leadership. As well, wage growth is currently at its slowest pace since the very early days of the pandemic. While both employers and employees should celebrate job growth that defied economists' forecasts of continued stagnation, they should also approach the future with cautious optimism.
For more insights into the Jobs Reports for Q3 2023, click here.