by Patrick Glynn
The Bureau of Labor Statistics on Friday reported the U.S. economy added 303,000 jobs in March, a large addition and about 100,000 jobs more than expected. While job gains contracted towards the end of 2023, the first three months of 2024 have shown the opposite: an upward trend. All of this is happening as job openings hover around three-year lows.
“It’s still a really tight labor market,” Matt Gonsalves, Vice President of Sales at Insight Global. “There are there are more job seekers than job openings right now, and job gains are fragmented across industries.” Far fewer people are voluntarily leaving their jobs, too.
Additions this month came largely from healthcare (+72,000), government (+71,000), leisure and hospitality (+49,000,) and construction (+39,000).
Other labor-related data from the last month of the quarter include:
- The unemployment rate decreased from 3.9% to 3.8%.
- Wages increased 4.1% year over year, down from 4.3% in February.
- Labor force participation (62.7%) continues climbing back to pre-pandemic levels (63.3%).
- Job openings, layoffs, and hire rates changed very little from January to February, according to JOLTS.
- Private employers added 184,000 jobs in March, according to payroll and HR services provider ADP, mostly in hospitality, construction, and trade.
- Year-over-year inflation hovered at 3.2% in February—slightly above January’s level. Core inflation, which takes out energy and food costs, was 2.8%. Both indicators are still above the 2% mark the Federal Reserve is aiming for.
- With this data, Federal Reserve chairman Jerome Powell said the Fed doesn’t expect to lower interest rates until “we have greater confidence that inflation is moving sustainably down toward 2%.”
Before the March 2024 jobs report, Powell called the labor market “strong but rebalancing,” and that the Fed sees “inflation moving down toward 2 percent on a sometimes bumpy path.”
That “bumpy path” and “rebalancing labor market” appear to be particularly prevalent in Information Technology (IT).
IT Trends This Year
Gonsalves says there are underlying trends that reflect why the IT job market may feel this way—and why he’s keeping an eye on these trends.
“While the economy seems to be doing really well, I think the market feeling the biggest hit is technology,” Gonsalves said. “While it’s not as tight as it was a year ago, I think we’re still waiting to see if the rebound is coming or is here. I don’t think it’s here yet.”
“But I wouldn’t be surprised if we see more of a bounce back in the second half of the year.”
1. IT Wages
IT wages are a big topic this year—one we’ve touched on before. IT job seekers made massive gains in wages from 2020 to 2022. But those started to come down in 2023, and Gonsalves says we’re seeing wages drop 10% to 15% from peak. It’s still coming back in level with gains made in previous years “but it’s becoming more of a reality for some of the people looking for technology jobs.”
Wages are a key indicator when it comes to decision making from the Fed. A decrease in wages in IT isn’t seen as the fix for inflation, but a continued downward trajectory could indicate a larger trend for wages.
2. Consistent Growth from Small- and Mid-Cap Businesses
Gonsalves says, even through these recent economic headwinds, small- and medium-sized businesses have consistently grown their labor supply over recent years. In IT, Gonsalves says, jobs in consistent demand right now are in:
The companies hiring quality talent in these areas “were the companies that lost the wage rates of 2022” to larger companies according to Gonsalves.
3. Nearshoring and Offshoring
“We are seeing more technical jobs in Mexico, India, Brazil, Eastern Europe than ever before,” Gonsalves says.
Companies have felt more inclined to look for talent globally after improvements in cloud technology, networking, and better communication platforms. Wages are generally cheaper in these areas, too—something cost-conscious companies are considering as questions about the future of interest rates and job openings remain.
He’s also keeping an eye on companies leveraging this option as a response to IT wages stateside.
by Emilie Skaug 
