Talent Market Update: September 2023

Posted on September 11, 2023

August showed signs of nomalizing job market, with conditions reminiscent of pre-pandemic levels.

As the labor market continues to cool, Feds are adjusting their strategy to manage inflation and are, for the time being, taking their foot off the gas on further interest rate hikes.

An interesting tidbit: pop culture may have influenced the state of the market.

Beyonce and Taylor Swift’s U.S. leg of their tours, and even the Barbie mania that continues to bring in repeat viewers, could have had to do with people spending more than they saved in August despite the increased unemployment rate.

In this analysis, we’ll discuss the latest trends in the employment market and what this means for employers and for the economy.

Key Takeaways:

187,000 jobs were added last month, above market expectations of 170,000
Unemployment rose to 3.8%, the highest since February 2022, partly due to less work available in certain sectors and an increase in workforce participation
As the labor market cools, Feds are, for the time being, no longer pressed to continue efforts to lower inflation.

Unemployment

Unemployment rose from 3.5% to 3.8%, the highest since February 2022.

A few factors could be at play.

The Hollywood writers and actors strike contributed 16,000 workers to the unemployment rate. And Yellow, a major trucking company, filed for bankruptcy and contributed 30,000 workers who are now without jobs. There were also 597,000 new entrants into the workforce, with no previous work experience and who want a job.

Though the unemployment rate rose, it’s important to remember that these numbers are being compared to an off-the-charts good job market for workers in 2021 and 2022. What we’re seeing now is indicating a return to pre-pandemic levels.

Workforce Participation

Workforce participation increased for the first time since March, from 62.6% to 62.8%, which is the highest since February 2020, right before the pandemic. Workforce participation includes those that are employed and those that are actively looking for work.

And the employment rate remained unchanged at 60.4%.

The number of persons employed part-time for economic reasons continues to stay about the same, at 4.2 million. These are people who wanted full-time work and held part-time jobs because either their hours were reduced or they couldn’t find full-time jobs.

The significant amount of new entrants into the workforce (597,000 people) could have contributed to the slight increase in workforce participation.

Number of Jobs Available

Job Openings January - July 2023. Source: U.S. Bureau of Labor Statistics — Job Openings January – July 2023. Source: U.S. Bureau of Labor Statistics

The US economy added 187,000 jobs in August 2023, which is more than market expectations of 170,000.

Previously, 200,000 was the threshold for a healthy job market in 2021 and 2022. But hitting below the 200,000 threshold in terms of jobs added is just another indicator of a return to pre-pandemic levels.

What does this mean for employers?

August has left some pros and some cons for employers. And there are things employers can do to leverage the state of the market, stay ahead of labor market trends and set themselves up for success.

Many people are entering the workforce for the first time.

Winning move: Though unemployment has increased and there are more people seeking employment, it’s still a tight labor market. Make sure your hiring process is speedy and your pay and benefits package is something you’re excited to talk about. Review job requirements for workers and identify where they can be more flexible in order to capitalize on this new talent pool.

Increased inflation rates may impact how you can grow your business and your staff.

Winning move: Explore retention as the new recruitment. Look to employees that are eager to learn and grow with your organization and provide training to help them level up their skills. Temporary or contract staffing is a great way to meet your staffing needs, regardless of the market.

There is talk of a “September Surge”

As summer vacations come to an end, employers gear up for the holidays, kids return to school, and parents have free time to look for work, some economists are predicting an increase in hiring in September.

It’s even earned a “September Surge” hashtag on TikTok.

It’s possible that we may see a hiring increase this month. Last year’s September jobs report showed that unemployment decreased from 3.7% in August to 3.5% in September.

No matter the market, we want to be a resource for you.

Don’t hesitate to contact us or check out our employer resource center for more insight into market trends. Our mission is to create Success Stories daily for the employees and clients that we serve.

Categories: Staffing Tips & Recruiting Trends

Tags: job market data, labort market trends, Talent Market Update, Talent Market Update September 2023

Talent Market Update: September 2023