August 2024 Talent Market Insights

By TERRA Staffing Group

Posted on August 9, 2024

July’s jobs report indicates a labor market that is performing below expectations and raising some concerns. 

Here are some of the key takeaways: 

• 114,000 jobs were added in July 

• Unemployment increased from 4.1% to 4.3%—the highest since October 2021 

• Workforce participation increased from 62.6% to 62.7% 

• Wage growth increased by 0.2% month-over-month. 

The report was released after the Fed’s July meeting, where they decided to hold interest rates steady again. With fewer jobs added in July, the Fed is under increased pressure to cut rates in September over concerns they may have waited too long.  

Let’s dive into the latest labor market trends and explore what this means for employers. 

Number of Jobs Available 

In July, job growth fell short of the forecasted 175,000. 

Industries leading in job growth were health care (+55,000), construction (+25,000) and transportation and warehousing (+14,000).  

Meanwhile, growth declined in information technology jobs (-20,000), financial activities (-4,000) and professional and businesses services (-1,000).  

Worth noting is Hurricane Beryl, which affected large parts of Texas, may have impacted these numbers. The Bureau of Labor Statistics will release the state estimates of employment and unemployment on Friday, August 16th.  

Overall, July saw the slowest job gains of 2024. 

Unemployment 

Unemployment increased for the third month in a row, from 4.1% to 4.3%, the highest since October 2021.  

People who were out of work for 27 weeks or more also increased, to 1.54 million, which is up from 1.2 million a year ago and the highest since February 2022.  

The consistently increasing unemployment rate has sparked the discussion of the “Sahm Rule,” which is used to gauge a recession.  

According to the rule, the economy is in a recession when the three-month unemployment average is half a percentage point higher than the 12-month low. In July 2023, the unemployment rate was 3.5%, and the current 3-month unemployment average is 4.13%.  

However, unemployment is still far below the unemployment rate throughout the 2010s. And even economist Claudia Sahm herself recommends not relying on just one tool to determine a recession.   

Workforce Participation 

Workforce participation inched by one decimal point, from 62.6% to 62.7%.  

The number of people who are not in the labor force who want a job increased by 366,000 to 5.6 million in July.  

And the number of people working part-time for economic reasons increased by 346,000 to 4.57 million, the highest level since June 2021.  

In the JOLTS report, which shows hires and separations for June, the number of separations changed little at 5.1 million. Notably, there were fewer separations in state and local government (-51,000) and in arts, entertainment and recreation (-39,000). 

These trends highlight ongoing challenges in the labor market, with increasing part-time work and a higher number of individuals seeking jobs despite the unchanged rate of separations. 

Wage Growth 

Wage growth has increased by 0.2% over the month and is up from 3.6% from one year ago. 

Average hourly earnings increased by 8 cents, a dip from last month’s increase of 10 cents. Wage growth is consistently cooling, and in turn, easing the risk of increased inflation.  

Winning Moves for Employers    

In today’s job market, employers need to focus on strategies that not only draw in top talent but also build resilience and ensure success, no matter the market situation. 

Here are some key winning moves for employers to consider: 

• Streamline hiring: Simplify the hiring process by reducing the number of interviews and using consistent, targeted questions. Provide prompt feedback to keep candidates engaged and interested. 

• Strengthen the employee experience: Emphasize the company’s mission to help employees see the impact of their work. Provide meaningful tasks, clear objectives, and a defined career growth plan to keep employees connected and committed to the company’s goals. 

• Provide the right resources for your team: Give your team the training and tools to succeed. Improving their skills and confidence helps them perform better and supports the company’s future. 

Looking for flexibility in your workforce? Temporary staffing is a great solution. It’s an affordable way to meet fluctuating needs and can help your business fill immediate roles, and identify long-term fits.   

If you’re interested in more resources, explore our employer resource center. There you’ll find an archive of on-demand HR webinars, tools and articles to help you address a variety of workplace challenges.  

And if you’re looking for insights into market trends, or need staffing support, don’t hesitate to contact us.  

Categories: Staffing Tips & Recruiting Trends

Tags: August 2024 Talent Market Insights, labor market trends, Talent Market Insights

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