The economy added 114,000 jobs in July 2024.

Unemployment rose to 4.3%, (up from 4.1% last month). This is the highest level since October 2021 though the uptick was due to an increase in labor force participation rather than an increase in people losing their job. The labor-force participation rate rose to 62.7% from 62.6%. Without the increase in participation, the unemployment rate would have stayed at 4.1%. A hurricane also hit seasonal/hourly work in July.

And yet, pandemonium ensued! 175k job had been forecast so that miss was upsetting. At the same time, Japan raised their rates above 0% for the first time in years. Traders had been borrowing in Japan and investing into US stocks so the combination led to a major sell off.

For those in a white collar job search right now, this likely feels more aligned to how they’ve been feeling. The professional level job market is crowded and incredibly noisy at the moment.

The growth numbers continue to come largely from healthcare (55k), construction (25k) and transportation/warehousing (14k). As seasonal work in construction slows down, will be interesting if we see a rate reduction from the Fed to buoy things.

On our end at Newance, we’re seeing a big jump in technical roles at the moment. It’s typical for us to see a rise in Aug/Sept hiring before another slow down in Nov/Dec. But each year now brings it’s own “typical”. description

The economy added 206,000 jobs in June 2024 with unemployment ticking slightly up to 4.1%.

So, why does this market sound good but feel bad for so many?

• 2021/2022 market was unhealthily HOT. The quick shift to layoffs creates an even bigger emotional dissonance of what it "should be like".

• That hot hiring market also pushed many professional level salaries way up right before rates jumped making capital also more expensive.

• Rising burnout + expensive capital = a resistance to employers hiring for potential.

• Low signal to noise for everyone. You can see *all of the jobs* and apply for *all of the jobs* and so can *everyone else* and thus people feel (understandably!) exhausted by hundreds and hundreds of applicants and applications. It is taking a big lift to get hired or to hire right now.

• The bulk of the job growth has been happening in healthcare & government sectors not professional services/tech/etc. Guess who posts on social about jobs?

• Views on certain news. I don’t have insider info on this but can anecdotally tell you that a post about layoffs and desperate job seekers gets approximately 10x the views of a post about anything else. Isn’t that interesting that bad news/emotional pulls would get a lot of engagement… kind of like… the news?

• Lowering trust in institutions and companies. Less trust leads to less hope.

• “Unemployment rate” is a specific measure from a cross section of households that is increasingly unreliable. For example, it doesn’t really include people who have all together given up on searching.

May 2024 added 272,000 jobs with continued growth in healthcare (68k jobs, monthly average have been 64k) and a significant jump in professional/technical services (32k, monthly average had been 19k). These outpaced estimates and were combined with a light tick up in unemployment.

AI is beginning to slow job growth in highly AI exposed industries. They are still growing but at slower paces. While tough in the near term, overall that may not be such a bad thing.

The sentiment in the job market (thanks algorithms for prioritizing those posts for engagement…) is certainly more negative with increasing anecdotal comparisons to the “great depression”. To be clear, white collar searches are definitely taking longer than 2021/2022 and employers are more reluctant to hire without a “perfect” fit. But the great depression saw an unemployment rate of 24.9%. That’s one out of every four people. Nowhere near today’s market.

Leverage remains with employers overall.

April added 175,000 jobs still driven by healthcare with another 31k in social assistance. Most sectors held fairly steady. Not exactly banner growth but it has people excited that rate cuts could be coming.

That would be welcome relief for businesses struggling with post-pandemic debt and individuals under record credit card debt. With rates high, this creates real strain to make a dent into any of that debt.

Specific to tech, tax relief remains stalled in the Senate after HR 7024 flew through the House with bipartisan support. The inclusion of the Child Tax Credit seems to be the sticking point but in the meantime, tech companies of all sizes (NOT just big tech!) suddenly have intense tax bills. To clarify — if a company spent $150,000 on salary they used to write that full $150,000 off as an expense in the year that it happened. When Section 174 expired, it defaulted back to a state where a company had to amortize that R&D expense over a number of years. So while they paid the $150,000 in cash that year, they pay taxes like they only spent a portion of that which creates a cash crunch.

Year to date, layoffs are down 4.6% from the same period in 2023. Can’t say it enough — we need to start expecting layoffs even in boom times because the implicit agreement that they were a “last resort” has been broken… and I don’t see anyone putting that back together. That being said, layoffs do have real cultural and productivity impacts beyond cash as Spotify’s CEO found out after their last RIF.

In big world of work news, the FTC has voted to ban noncompete agreements.

Noncompetes were once typical only for executives but have expanded in recent decades to be a default condition for most employees.

California, Minnesota and others already ban noncompetes. In most states today, only narrowly written noncompetes are currently enforceable.

Several groups representing businesses at large have already committed to fighting the ruling (for example the Chamber of Commerce) and enforceability will likely stay murky for bit.

My own view on this is that if you lead with trust, 90%+ of the time it will be returned to you in fairness and respect.

For now, expect employees to move more freely between competitors. This doesn’t apply to nonprofits (not managed by the FTC) or certain leadership roles as defined by compensation over $151,164 and in a policy-making position.

Video option here on YouTube!

March 2024 added 303,000 jobs still driven by healthcare and government with a pop in construction.

Business and personal bankruptcies are up as high rates continue. Layoffs continue and hit 14 month high. I suspect we’ll see layoffs as a regular theme in the coming years rather than events specific to financial performance. Companies who want to move in new directions will likely be faster to make changes as will employees who move from role to role.

Generational shifts continue at work with a few SIX generation workplaces! Good news for skilled labor, Gen Z are taking to trade schools with enrollment numbers reaching their highest peak since 2018.

February 2024 added 275,000 jobs largely in healthcare and government.

Tax credits for R&D (software engineering jobs included!) is stalled in the Senate and profitable tech companies (not just big ones!) are holding their breath.

I’m hearing more chatter about reduced schedules in addition to pushes for remote. This is in contrast to CEO’s feeling more optimistic about the economy and moving towards more aggressive growth.

Big jumps in AI job postings (42%) according to Indeed and more.

January 2024 saw 353,000 new jobs added. Growth was observed across several sectors, leading to an increase from December. Notably, while healthcare and government sectors continued to expand, the business services, retail, and social assistance sectors also experienced significant gains.

CEO sentiment is up as inflation cools and consumer spending stays high. While they may be more bullish, the emphasis on performance and slower fundraising environment is likely to remain. Financial performance was once one of the only leading indicators of layoffs but I believe those days are largely behind us. We’ll likely continue to see layoffs where executive teams see opportunities for efficiency. Those companies who find other ways to reach peak performance without overt layoffs are likely to see some goodwill towards their employer brands. See: Nintendo’s notoriety amongst widespread gaming cuts.

Excellent tech news as moves to restore Section 174 are nearly official and R&D expenses open back up to include hiring!

While Gen Z become the 2nd largest generation in the workforce (#1 spot goes to Millennials), burnout remains high across all groups.

Specific to younger workers, new estimates say that workers under 30 are losing 54 days a year (do that math! that’s a little over one day/week!) where they may be clocked in but are not effectively working due to health or mental health challenges. Attempts at wellness programs are not quite mending this gap with less than a quarter of employees taking advantage of those offerings.

I believe we’ll see this line (unfortunately!) continue to blur as to who is responsible for health and wellness between employer, society and employee themselves. Continued conversations and different definitions around “safety” at work make this more challenging with older generations being more accustomed to that conversation around physical safety and for younger workers that word encompassing identify and workplace conflict in broader ways.

December 2023 exceeded job growth expectations at 216k jobs. Growth continued to come from Government and Healthcare.

Overall we ended 2023 up 2.7M jobs. That’s not bad! But felt kinda bad in comparison with the 4.8M jobs we added in 2022. And layoffs are a bummer!

Section 174 is having real impact on tech companies and I suspect layoffs in tech will escalate across Q1 and Q2.

Will be chatting 2024 trends LIVE on 1/16 (RSVP here). Highlights include: shifting demographics (Gen Z > Boomers!), AI changing jobs (see: Google’s Ad Sales restructure) and widening skills gaps.

The US added 199k jobs in November of 2023. Those numbers were aided by several major strikes ending including UAW (+30k jobs) and SAG (+17k jobs).

Overall, this is solid traction to tick unemployment down slightly. Gains continued to come largely from healthcare and government. Soft holiday hiring contracted roles in retail/hospitality which had previously been a major source of job growth.

In 2024 there will be more Gen Z than Boomers in the workforce. Boomers continue to retire at higher than expected rates. 2M more have retired this year. Millenials will remain the largest group in the workforce until the 2040s.  Consider that the oldest of Gen Z are already 27 so this isn’t just college grads/entry level workers. 

What does that mean? Expectations around transparency, collective action and establishing firmer boundaries are likely to grow. 

Worldwide, the population over 60 will nearly double from 12% to 22% according to the World Health Organization. Reversing demographics including birth rate would take decades and labor shortages without technology changes (oh hey, see: AI) will grow.

Immediate impacts in creative spaces like writing and design though jobs aren’t necessarily disappearing yet. Instead, the wage growth is flattening and in some cases even beginning to compress. White collar professional jobs are the most likely see AI exposure in the near term. Jobs that are about “doing” rather than “deciding/setting strategy”.  Take for example, the minute that Emmett Shear was at OpenAI — the big strategic decisions are not likely to be automated but plenty of a CEOs job could readily be automated. 

It’s not ready to fully replace though as this now-fired lawyer found out! Or this person who had AI send 5000+ applications… but only got 20 interviews. 

In physics, the half-life of a radioactive substance refers to the time required for half of the substance to undergo radioactive decay. Applied to skills in the workplace, the half-life metaphorically describes the time span after which half the value or utility of a skill has been lost due to changes such as technological advancements, market dynamics, or evolving job requirements.

The half-life of a skill used to be estimated to be around 26 years. Recent studies put the half-life of skills at work to be somewhere between 2 years and 5 years.

The implications of that pace of change cannot be understated. That changes the window for talent development and planning from decades to years. Slack for instance is shutting down for a week just to focus on ramping up on new skills.

An early paper from Xiang Hui, Oren Reshef and Luofeng Zhou shows early and strong impacts on freelancer projects and rates post-ChatGPT for writing and editing.

Collective action continues to be a space to watch. According to Cornell, the number of workers on strike has increased 10-fold since 2021. While UAW strikes continue, workers from Walgreens, the New York Times and more have walked off the job.

We cautioned in October to not get excited and… no one got excited in November. Jobs numbers were revised down 100k for Sept/October and the recent jobs numbers came in at 150k just under expectations. Growth has continued to rely heavily on healthcare, government and leisure/hospitality growth which combined have been over 70% of the growth in the last 12 months.

SAG-AFTRA strike has ended largely in favor of writers including restrictions on the ability of studios to replace writers with AI.

UAW (auto workers) strike continues and Kaiser saw the largest ever healthcare worker walk off with 75000 workers leaving for 3 days.

I continue to advise companies to prepare for more employees sharing salary data (a protected activity!) and banding together for requests. That preparation should include both leveling compensation as well as skilling up in persuasive skills in groups.

After a soft August, September added twice as many jobs as expected with a total of 336,000 jobs added largely in leisure & hospitality, government and health care.

We do see employers moving forward with more confidence. Sentiment tends to become reality the same way that fear begets more layoffs. A few reasons (sorry!) not to roll out the party supplies quite yet:

September is typically a more robust hiring month after positions get pushed out of summer vacation season. Some of this is pent up demand not net new health.

The Federal funding propping up more than 70,000 day care centers expired at the end of September. Their closures could lead to more than 3.2 million children without childcare by the end of the year. When kids have to stay home, parents (disproportionally women in particular women of color) are forced to leave the workforce. That hits consumer spending in particular in hospitality which was the top job growth sector in September.

This raises the chances for more rate hikes already straining banks and lending in attempt to cool the economy back down. Despite executive optimism around return-to-office, I was recently at an event where candid bank execs were quite clear about their pessimism for commercial real estate and the strains in that sector.

Employers continue to push and employees continue to pull in terms of engagement, remote work & more.

Everyone seems to want a definitive “which is best” and the data so far can be cherrypicked in either direction. A small push towards hybrid seems to becoming the norm but remote work enthusiasts are just as passionate.

The tradeoffs don’t seem to be quite satisfying for either party - employers or employees.

Employers are increasingly concerned about Gen Z’s readiness and resilience in the workplace which only adds to their interest in return-to-office policies. For now, I see this tension only growing as more first-ever-jobs move from high school to post college.

90% of executives in a recent KPMG survey acknowledged they are likely to tie financial rewards (bonus, promotion etc.) to in person attendance. At Newance, we see literally 100x the applications for “remote” positions vs. “hybrid” which reflects both interest and widening the available options geographically.

Despite a softening job market, employees are demanding 11% higher wages YoY to make a move.

Curious on this one? See the recording of our Nov 7th chat here!

This NLRB continues to be extremely supportive of organized labor including new clarifications that further dissuade any union busting and punish companies who attempt it.

With ongoing strikes in entertainment to reality TV stars talking about unionizing, collective bargaining is meeting pop culture. And they have reason to be inspired including a historic win for UPS.

A new major strike by UAW (union auto workers) has kicked off as of September 15th with 13000 + workers walking out.

It’s not terribly surprising that AI is being “humanized” on a few fronts. We test AI as though it were a human taking a test. We’re assuming people want their robot coworkers to take a human shape that’s harder to build. For now, this may be an early attempt at understanding AI and getting ourselves more comfortable but it speaks to a growing disconnect between the perception and reality of AI at work. That gap plays out in already massive talent gaps between available AI experts and technical AI roles. There has been a 20x growth in AI/AI related job postings while only 1 in 10 employers is offering AI training according to a recent Ranstad study. Accenture has begun a journey to double their AI focused staff from 40,000 to 80,000 including training from basic courses to machine learning models.

This isn’t just about coding. A general sense of technical intuition and the ability to understand/implement AI from a strategic view are increasingly valuable and rare skills.

The BLS numbers are in and the economy added added 187,000 jobs in August. That brings the three month total average to 150,000 jobs/month. For comparison, in 2021 we added an average of 537,000 jobs per month. In 2009, monthly job losses were near 60,000 to 70,000.

Great news - unemployment ticked up! Why is that good? It moved up because unemployment is a count of people in the job market actively looking for work and more people rejoined the labor force. This increase in participation is the first in decades. With many critical jobs like air traffic control, nursing and childcare experiencing record and growing labor shortages, increases in overall supply of labor is critical.

There are a few unusual events impacting numbers this month for example Yellow Trucking out of business (36000 jobs lost) and strikes continuing in entertainment (17000 jobs lost). What were large losses in transportation may reverse in the coming months although transportation is often seen as a bellwether for consumer spending.

The Cost Index (wage growth) comes in quarterly but Q2 figures show a 4.3 to 4.5% increase over the last 12 months. That growth is also slowing.

Overall, economists are happy with these numbers as they reflect a cooling but still lightly growing job market.

Employers are turning up the heat within their teams and raising their expectations of employees. In 2022, leaders were (understandably so) all about what perks to add and how to share their values for talent attraction. Number of hires was a success metric in and of itself (a huge mistake!).

In 2023, employers are reconsidering what metrics matter. More leaders are thinking about things like “revenue/employee” and revisiting higher intensity KPIs. This is due to the leverage shifting back to employers as well as the pressure of higher rates/tougher fundraising/more conservative customer spending hitting management philosophies.

In May, we predicted more “wartime CEO” mode to come and that’s coming to life even at the intern level (see: Insight Partners leaderboard).

Some of this shift to results is warranted and overdue (work is an exchange after all!) but it remains to be seen how workers will react. Their growing disillusionment is unlikely to be cured by the ole bullpen style pressures of decades past. While Gen Z may be the most vocal on the internet, this widening gap is happening across demographics thanks to continued burnout and the societal shake up of Covid-19. This growing pressure contributes to evolving conversations about unionization and collective bargaining by workers.

That’s not to say that the idea of “experience” or creative recruitment is gone all together. Ikea’s new San Francisco coworking space and Roblox’s new interactive career center show creative talent attraction is alive and well.

As more people use ChatGPT, it’s inputs evolve and that has resulted in significant “drift” and declines in accuracy. Trust in AI overall remains low.

Active openings focused on AI strategy, compliance and implementation are hitting the market. For example, this spot at ThermoFisher.

I have a long list of other new job predictions here!

General purpose robots are emerging (think: 1 robot that can perform multiple and varied movements vs. 1 robot doing the same task repeatedly) quickly with per hour availability. This ability to add labor without high up front capital investment is sure to accelerate this trend. The robots are not perfect and require human supervision but this is a compelling space to watch. My prediction is that white collar office/clerical/professional jobs will see displacement first.

Of the 80k layoffs reported, 4k noted AI as the primary factor for eliminating a position. That’s notable but still a small overall percentage.

Not all AI replacements are going well. We’ve noted increased union activity overall. A recent non-profit attempt to replace a unionizing workforce with AI brought dangerous results. This kind of workforce replacement is still a “when not if” scenario but “when” is not right now.

90% of laid off H1B Visa holders were able to find new positions before their 60 day window to find new employment closed. The remaining 10% is still a considerable loss of skilled talent who (often US educated with advanced degrees) will take their skills and experience to other countries. This is a tough hit after 2020’s significant drop in both applications and approvals from policy changes amidst Covid-19. As predicted, competing counties have started ramping up their pursuit of these skilled workers. Canada is rolling out the red carpet for US H1B holders.

According to the WEF’s 2023 Future of Jobs Report, nearly half (44%) of individual workers need to be upskilled already. Big banks in particular are aggressively pushing AI hiring in their cost and profit centers and have listed thousands of jobs related to or focused on AI.

With the exception of mining, transportation, and utilities, most industries experienced an increase in employment. However, there has been a decrease in the number of hours worked, indicating shorter schedules for hourly workers.

Nevertheless, based on our anecdotal observations, it seems that many employers are cautiously expecting a stable and consistent business environment, contrary to the concerns seen in the first quarter.

We added 187,000 jobs in July which is very mild growth and slightly lower than expectations.

Early signs of AI enabled work are impacting hiring plans more than full on job replacement so far. Advances in GitHub Copilot can enable 1 engineer into many (my confidential sources are saying 40x with new releases coming) while IBM plans on supplementing their current workforce rather than hiring 7800 additional people. 

Decrease in tech layoffs but layoffs are continuing mildly market wide.

Layoff rate in the information sector (aka tech) is down to 16k/month in April from a previous monthly average of 49k. Layoffs overall were up 20% for a total of 80k according to a Challenger, Gray & Christmas study.

Job openings reversed declines (9.7 to 10.1M) but these increases are largely in retail, transportation and warehousing. Job openings fell in accommodation and food services, business services and manufacturing. The unemployment rate rose to 3.7% in May.

The market overall still seems to be cooling though numbers continue to surprise economists.

We are still adding jobs overall but that rate is slowing and certain professional sectors are not seeing that growth.  

Hiring increased month-over-month in 8 of 20 industries – this is an increase from the 4 industries that saw hiring gains in February - Farming/Ranching/Forestry, Utilities and Oil/Gas mining saw the largest growth. 

Unemployment remains low at 3.5% overall. This is not a full on “employers market” yet.

Expensive capital (see: rates) and ongoing economic concerns (see: banking, commercial real estate, inflation) mean more leaders are turning to “Wartime” mode whether they call it that or not. This may include pushing for return-to-work (which does force some voluntary attrition aka people quitting - and yes, they know that!) and/or other “austerity measures”. 

While this isn’t necessarily positive “leverage” for employers. It does impact their mindset and the aggressive stance they may feel is necessary in negotiations. They have ground to make up after (many would say) excessive hiring in 2022 and even into 2023. Most unicorns increased headcount over the last year.

Rises in unionization efforts even expanding to contract workforces along with a more pro-worker NLRB and FTC.  Policy changes range from additional union organizer protections, updates to non-disclosure for severance and proposals to ban non-compete agreements. As of June 2023, non-compete agreements are also being held to more pro-worker standards.

For decades, union membership has been falling but I see more collective action in our future. See: recent writer’s strike and over 155,000 civil servants in Canada on strike over remote work.

Leaders should absolutely be preparing for how to manage more organized labor whether they formally unionize or turn to group negotiations.

Labor force participation trended up a tiny bit month over month but remained below pre-pandemic levels.  Likely to stay low given demographic shifts with Boomers retiring and fewer incoming workers to take their place. From #worktok to increasing conversations around mental health, younger employees are also more likely to advocate for more work/life balance and lower overall hours worked.