The solid economic growth of the past few years hasn’t translated for professionals looking for white-collar jobs. A hiring boom in 2021 turned into a slump by the second half of 2022 as rising interest rates and a post-pandemic hangover in key industries led companies to focus on controlling costs. Labor market conditions now appear to be somewhere between stabilizing and improving for these workers, pointing to better times ahead.
The best way to gauge this is by looking at the Bureau of Labor Statistics’ monthly Job Openings and Labor Turnover Survey, and focusing on the professional and business services category that encompasses roles such as corporate managers, accountants, lawyers and technical workers. The hiring rate here, which looks at how many people found jobs in a given month compared with the number employed in that industry, stabilized in the back half of 2023 from a year earlier after significant declines in late 2022 and early 2023. It’s now recovered to be slightly positive on a year-over-year basis. You see the same pattern in the finance and insurance group.
One reason hiring slumped was because workers, worried about headcount reductions, stopped quitting their jobs as rapidly as they had during the 2021 boom. More people stayed put as opportunities in the labor market dwindled. With turnover slowing, companies had less need to hire. Here again we are seeing a stabilization — we’re not back to 2021’s heady pace of worker churn, but fear of job loss appears to be dissipating, and workers are starting to become more confident about exploring their options.