July Jobs Report: Economy Sees Steady, Positive Trends Continue

The Bureau of Labor Statistics today reported that the United States economy added 187,000 jobs in July, slightly below projections but in line with expected strong but steady growth.

The BLS reported that job gains were primarily in:

  • Healthcare
  • Social assistance
  • Financial activities
  • Wholesale trade
  • Leisure and hospitality

Matt Gonsalves, Insight Global’s Vice President of Technology Staffing, said of the July jobs report “it seems in line with trends that we’ve been seeing.”

“We’re not seeing a mass addition of jobs, but we’re also not seeing mass layoffs. A lot of employers and employees right now are in wait-and-see mode.”

Some other recent economic data that shows a steady but positive trend for the economy include:

  • Unemployment (3.5%) hovers around historic lows across the board
  • Wage growth is continually inching down, with wages raising at just 0.3% in July
  • Job openings are slightly down from 9.8 million at the end of May to 9.6 million at the end of June
  • At the same time, voluntary quits dropped to 3.8 million in June
  • The percentage of prime-aged workers in the workforce (80.9%) stayed the same in June and July. This is the highest percentage of prime-aged workforce activity since the early 2000s

These numbers come off Federal Reserve chairman Jerome Powell saying that the labor market is finding a “better balance” in terms of “higher labor force participation, some easing in nominal wage growth, and declining vacancies.”

This was paired with year-over-year inflation falling to 3% as reported in July.

How is Tech Hiring Doing?

The concerns about a potential recession began in the summer of 2022 as inflation ran hot, and large tech companies started to let employees go or freeze hiring. But, over the last six months or so, layoffs have slowed, and while some larger companies have still hired some spaces, as Gonsalves said, many have hovered in wait-and-see mode.

Insight Global is the second-largest IT staffing firm in the U.S., and Gonsalves said he’s started to see an uptick in temporary placement among larger tech companies. (Tech hiring among mid-cap companies never really slowed over the last year as the war for talent shifted in their favor as tech layoffs happened, he said.)

“I wouldn’t say it’s enough to get excited and say we’re out of out of this downturn,” but there’s enough demand right now to give hope that a turnaround is near.

Gonsalves said the areas in tech that have seen the most demand recently include:

  • Development: This includes software development, app developers, and more. Software development is one of the most popular areas for job seekers in 2023, too.
  • Artificial intelligence: Content moderators and coders are needed to build and train AI. The industry is still pretty new, though, Gonsalves said, and companies are still learning roles needed in this space and how AI plays a part in their business.
  • Nearshoring and offshoring: As businesses still try to maintain productivity during a wait-and-see period in the U.S., there’s been a boost in companies finding talent in places like Mexico, Argentina, and India—especially when it comes to development. to potentially get talent for lower wages than they can find in America. “Cost is more of a conversation than ever before,” Gonsalves said, and some companies have found that in nearshoring or offshoring some roles. “That is a common cycle that we see during times like this. We saw it in 2008 and 2009. And here we are 15 years later, and the technology and the ability to manage and use teams that are on the other side of the world is so much better than it was then.”

Teams Are Becoming More Local

As the economy goes through a bit of a reset during the “wait-and-see” mode, many companies are using this as a time to reset fully remote work expectations. The majority of new job postings are for non-remote roles (this includes hybrid work). And many managers are having to re-learn how to build teams locally.

However, Gonsalves says managers cannot simply have employees “sitting in their cubicles and doing their work by themselves all day.”

“That’s no different than when they were remote.”

Managers must explain the reason behind returning to the office, he said. Those reasons can be (but are not limited to):

  • Collaboration
  • Development
  • Building a team that can solve problems together

These reasons must be put into action, too. “If employees come into the office and they’re becoming better at their jobs, projects are getting done faster and more efficiently, and they’re solving problems better as a team, I think most employees are going to see the benefit.”