November Jobs Report: Hiring Continues to Cool as Economy Stabilizes

The United States economy in November added 199,000 jobs, according to the Bureau of Labor Statistics, an uptick from October. Unemployment also dropped to 3.7% from 3.9%.

The total jobs number is affected by union workers returning from strike, particularly in the automotive sector, economists say. When auto workers went on strike, the manufacturing sector was reported to have lost 32,000 jobs. In November, as those workers returned, the manufacturing sector added 28,000 jobs (automotive accounting for 30,000). Some economists have used that to adjust November’s total jobs number to 169,000, given many of the jobs “added” were union members returning to work.

In either case, the November jobs number was below the 12-month average job gains of 240,000 seen monthly.

“The job market remains resilient,” said Matt Gonsalves, a vice president of Insight Global’s technology division. “But the reality is, demand is down. Job openings are also down. There are still more people looking for jobs than jobs are available—especially in tech.”

He noted, though, that we’re at the “tail end of a wait-and-see mode,” and that, “from talking to our customers, there is going to be good demand for hiring next year.”

“I foresee the job growth that we’ve seen this year continue.”

Some other economic data released over the last week includes:

• Job openings (8.7 million) hit their lowest level since March 2021. “Job postings in IT are the lowest that they’ve been in five or six years,” Gonsalves said.
• At the same time, prime labor force participation (25 to 54) remains near an all-time high.
• Healthcare, government services, and hospitality were the sectors that added the most jobs in November.
• Continuing jobless claims dropped to 1.861 million but still remain around an 18-month high.
• Average hourly wages rose 0.3% month-over-month and 4% annually. Gonsalves said there is room for wages to backtrack into 2024, and there hasn’t quite been the full normalization—or decreasing—of rates hiring managers and federal policy makers want to see.

The economy in 2023 was defined by the fear of a recession happening—that didn’t happen. However, interest rates rose, inflation has started to fall, and hiring across various sectors—especially in tech—was in flux.

So, as we look forward to 2024, we talked to Gonsalves about what hiring could look like next year, primarily in the tech sector.

Growth in Various IT Areas

The defining theme in 2023 in IT was artificial intelligence. Naturally, Gonsalves says, there will be continued investment in these technologies into 2024, but it will be a year where companies and hiring managers define the skill sets and job types needed in this area.

“Does a business need software engineers, or do they need data scientists? Or do they need content moderators—or someone that can help teach these technologies how to work as efficiently as possible?” he asked.

As the sector grows with investment, these job roles, types, and skills needed should become clearer to businesses of all sizes.

Some other areas of IT expected to continue to see growth include:

• Cybersecurity: Despite heavy investment from companies over the last half-decade, he said there’s still a huge skills gap in the industry—and more skilled job seekers are needed to fill roles. There also remain opportunities for companies to invest in reskilling and upskilling in this area.
• Cloud: “It’s very rare that any of our customers—small, medium or enterprise—have made a full transition to the cloud and so there’s still going to be a lot of demand for cloud workers.”

Continuing RTO

Gonsalves said that businesses of all sizes—especially large enterprise businesses—will continue to push return-to-office policies in 2024.

“We’ve seen more RTO policies and less remote job openings” as the year has gone on, he said.

Great Opportunities for Small- and Medium-Sized Businesses

Despite the flux in hiring this year, Gonsalves said that hiring at small- and medium-sized businesses has remained pretty consistent throughout the year. That is backed up by ADP employment data by establishment size.

Throughout this year and into next year, Gonsalves sees this trend continuing, as small- and medium-sized business can continue to compete with larger firms for skilled and quality talent.

“2024 will be a great year for employers to find exceptional talent.”