US Employers Report Positive Hiring Outlooks for Q4

The U.S. reported one of the strongest fourth-quarter hiring forecasts worldwide, while the global hiring outlook for the remainder of 2024 weakened compared to the same time last year, according to the latest projections from ManpowerGroup.

The recruiting and staffing firm gathered data from 40,340 employers across 42 countries in July.

“The global labor market is holding steady as we move into the fourth quarter, with relatively low unemployment and layoff activity in many countries,” said Jonas Prising, ManpowerGroup chairman and CEO. “While the gradual quarter-over-quarter improvement shows employers are cautiously optimistic about hiring, the drop from a year ago suggests employers remain prudent in the midst of uncertainty.”

The technology sector reported the strongest hiring intentions.

“The continued strong outlook in the IT sector is driving demand for tech talent, especially with AI top of mind for businesses across every industry,” Prising said.

In a recent survey of more than 2,500 hiring managers in the U.S., conducted by staffing firm Robert Half, 52% of employers said they planned to add new positions in the second half of 2024, and 43% were planning to fill vacant positions. None said they were eliminating positions.

The technology sector once again led the way in demand, with 58% of hiring managers looking to fill tech roles, followed by human resources positions (56%) and legal roles (50%).

“The start of September traditionally ushers in a period often referred to as the ‘September surge’ in recruitment, an increase in hiring activity after a summer lull caused by vacations and a decrease in talent acquisition efforts across various departments,” said Jack Kelly, founder and CEO of New York City-based executive search firm Compliance Search Group and social media platform WeCruitr.io.

“Organizations with fiscal years starting in October, including the federal government, typically see a significant increase in job openings during this time,” he said. “Additionally, as the fourth quarter looms, businesses often discover unused funds in their annual budgets, prompting a last-minute push to bring on new talent.”

Employers should expect positive hiring news this year as labor market conditions have been loosening for some time, especially in certain sectors, explained Justin Ladner, senior labor economist at SHRM.

Ladner pointed to one clue in the monthly ratio of unemployed people to job openings. “It compares the population of people who do not have a job and are looking for work to the set of open jobs that firms want to fill at any given point in time,” he said. “The ratio has been steadily rising for some time, and as of July, the gap between job openings at about 7.7 million and unemployed people at about 7.2 million is well below what it was only a few months ago. In short, employers looking to fill positions today are, at least on average, facing less competition from other employers and a larger population of people looking for work.”

Relatedly, wage growth has moderated significantly over the last couple of years, Ladner said. “Annual growth in hourly earnings is still above its pre-pandemic average, but it has fallen steadily since early 2022,” he said. “This lower growth rate is good news for employers because it means that, on average, the wages they have to offer to attract and retain talent are growing more slowly than was the case a short time ago.”

It is important to note, Ladner added, that the labor market is still relatively tight by historic standards, and that competition for available talent is still strong.

“Furthermore, labor market conditions vary considerably by sector and skill set,” he said. “For example, demand for jobs in the information sector has cooled dramatically, whereas labor demand in sectors like health care and construction remains quite strong. As such, the difficulty that firms will face with respect to hiring will vary significantly according to their industry and the roles they are looking to fill.”

ZipRecruiter Chief Economist Julia Pollak said that labor market growth has been slowing for the past two years, and she expects that trend to continue for several more months due to the lagging effects of monetary policy.

“The tight availability of credit in recent months prevented borrowing that would otherwise have financed expenditures and investments—and related jobs—over the next few months,” she said. “So high interest rates will have a drag on the labor market for several months to come.”

The Federal Reserve cut interest rates on Sept. 18 by half a percentage point to about 4.9 percent, down from a more than two-decade high.

Pollak said that normalizing interest rates will gradually normalize the housing market, car sales, venture capital funding, business investment, and consumer spending.  

“I therefore expect hiring to reaccelerate at some point in 2025,” she said.  

Kelly said the upcoming U.S. presidential election may cast a shadow over consumer spending and business decisions, with many opting to wait for a clearer political landscape before making significant financial commitments. In addition, ongoing geopolitical tensions in the Middle East and Ukraine continue to inject volatility into global markets.

“These factors combined create a complex economic environment where caution prevails, which may exacerbate current employment trends and further complicate the path to economic stability,” he said.