December 2023 Talent Market Insights

By TERRA Staffing Group

Posted on December 15, 2023

“Soft landing” was the name of the game this year. As 2023 comes to an end, December’s jobs report shows a steady labor market.  

199,000 jobs were added in November, an increase from October’s job gains of 150,000. And September’s hot market growth was revised down from 336,000 to 267,000, showing a significantly cooler labor market than was thought.  

We’ll talk about what’s happening in the talent market and how it affects employers.  

Key takeaways:

• 199,000 jobs added in November—above the forecasted 190,000.
• Unemployment decreased slightly from 3.9% in October to 3.7% 
• Workforce participation has remained relatively flat since August 
• Average hourly earnings increased by 0.4%  

Number of Jobs Available 

November’s job gains show a labor market that has moderated.  

And the latest Job Openings and Layover Survey (JOLTS) shows job openings in October dropped to 8.7 million, lower than the expected 9.4 million. Currently, there are 1.3 job openings for every person, compared to a recent time when there were 2 job openings per person. 

While it is being reported that these are the lowest levels since March 2021, the number of job openings per person are still above pre-pandemic levels.  

Leading industries in job growth include healthcare (77,000), government (49,000) and leisure and hospitality (40,000), the latter of which mostly come from dining.  

Manufacturing and jobs in the motion picture industry saw an uptick in job gains, reflecting the end of labor strikes. Worth noting is that these are one-time gains.  

Unemployment 

Unemployment decreased slightly from 3.9% to 3.7% 

Among black men over 20, unemployment increased from 5.3% to 6.4%. Though as a whole, unemployment remained unchanged at 5.8% for black or African American workers.  

For Asian American workers, unemployment increased for a second consecutive, from 2.8% in September to 3.5% in November.  

Retail lost 38,000 jobs, mainly coming from department stores. 

Spotify laid off 17% of it’s workforce last week which will affect the future unemployment rate. Consumers aren’t the only ones feeling the brunt of spiked interest rates, as the Spotify CEO attributed high borrowing costs as one of the reasons for a mass layoff.  

Overall, Feds are keeping an eye on unemployment, as this will inform their decision around rate hikes in their efforts to moderate inflation.  

Workforce Participation 

Workforce participation slightly increased to 62.8%, though it has remained somewhat flat since August.  

 532,000 new entrants to the workforce attributed to this slight growth.  

People not in the labor force who want a job dropped for the second consecutive month, from 5.4 million to 5.3 million.  

The number of people employed has remained relatively unchanged (though consistently inching up since 2021).

Labor participation remains steady, which is a sign of a strong economy.  

Wage Growth 

In November, average hourly earnings increased by 0.4%, in line with expectations. 

Like the employment rate, wage growth is consistently inching upward.    

Wage growth, while positive for workers, is a reason for companies to raise prices. Which may be another factor forecasting the future of consumer spending, overall affecting inflation and the health of the economy. 

Consumers are now facing “out of control” interest rates and the last of the Covid-era stimulus payments running out, after a summer of robust spending.  

Feds will keep an eye on rising wage growth as the year ends. 

Economic Variables to Keep an Eye on 

There are a lot of economic variables that can influence the labor market. Here are two that are worth paying close attention to: 

• Consumer spending: Though December is traditionally a time where people spend more for the holidays, consumers who are in debt or financing spending through credit cards may be tightening their wallets due to increased rate hikes. 
• Fed’s announced their decision this week to hold interest rates steady for the third consecutive month, and hinted rate cuts coming in 2024.  

What does this mean for employers?  

The labor market remains tight with about 1.3 job openings available per unemployed person. 

Here are some effective strategies to maintain a competitive edge: 

Stay attractive to talent. With less jobs available, employees may be more reluctant to job-hop right now, which means it may be harder for businesses to recruit new employees. To attract (and retain) talent, ensure your compensation, benefits and job perks are competitive and align with industry standards.  

Nurture in-house talent. Turnover is expensive and time-consuming. Ensure your business provides training, growth opportunities, and unique perks so that employees don’t seek them elsewhere. 

Explore alternative talent sources. Consider candidates you might have overlooked to ensure a broader pool of potential hires with varied experiences. 

Leverage temporary staffing. In a changing economy, temporary staffing can be a beneficial, cost-effective solution for businesses. It provides flexibility around staffing needs and can help meet productivity goals and project deadlines, regardless of market conditions. 

If you’re looking for more resources, be sure to check out our employer resource center. We have an archive of on-demand HR webinars, tools and articles to help you navigate various workplace challenges.

Feel free to reach out to us for insights into market trends and assistance with your staffing decisions.

Categories: Staffing Tips & Recruiting Trends

Tags: job market data, labor market trends, Talent Market Insights, Talent Market Insights December 2023

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