The latest GDP report indicated a 2.8% annualized growth rate for the July to September period, building on a 3% increase in the previous quarter. Consumer spending played a significant role, rising at a 3.7% annualized rate, contributing nearly 2.5 percentage points to overall growth.
The October jobs report revealed a stagnation in job growth, with only 12,000 new jobs added in a month where total employment reached 159 million. This disappointing outcome, exacerbated by hurricanes and labor strikes, suggests underlying weaknesses in the labor market. According to ZipRecruiter chief economist Julia Pollak, the report reflects a broader trend of a slowing labor market, even as the unemployment rate remains steady at 4.1%, the lowest heading into a presidential election since 2000. Notably, revisions to previous payroll numbers indicated a loss of 112,000 jobs in August and September, and the share of adults employed fell by 0.2 percentage points.
Tech employment remains stable, according to a recent analysis by CompTIA. The tech unemployment rate held steady at 2.6% in October, while the national unemployment rate also remained unchanged at 4.1%. The report highlights a positive trend in hiring, with 223,000 new job listings for tech positions and an increase of 70,000 tech professionals in the workforce, bringing the total to nearly 6.5 million. However, employment within the tech industry sector saw a slight decline, losing 4,029 jobs.
According to the National Federation of Independent Business’s October jobs report, small business employment remains steady despite ongoing labor market challenges. The report reveals that 35% of small business owners reported unfilled job openings, the highest since January 2021. Hiring efforts have decreased, with only 53% of owners attempting to hire, down six points from September. Notably, 46% of those hiring reported few or no qualified applicants, while 25% found only a few qualified candidates. Additionally, job vacancies were most pronounced in construction, transportation, and wholesale sectors. Despite a net 31% indicating they raised compensation, this marks the lowest increase since April 2021.
A recent study by the International Workplace Group reveals that 95% of CEOs have invested in new technology over the past year to enhance hybrid working, with 43% identifying technology as their largest investment. Looking ahead, 87% plan to continue funding advancements in areas like Cloud, AI, and security, driven by the desire to improve employee experiences and achieve cost savings. Notably, only 21% of individuals are willing to commute more than 30 minutes for a job, prompting businesses to shift from traditional downtown offices to regional spaces. Investment priorities include cloud technology at 62%, AI and automation at 52%, and security at 52%. The study indicates that hybrid work has increased productivity for 74% of employees and job satisfaction for 85%. Mark Dixon, CEO of International Workplace Group, emphasizes that these investments reinforce a long-term commitment to hybrid working.
Why do we care?
These report highlights that while the labor market is still growing, the pace is narrowing, raising concerns about future employment trends. And, the findings underscore the persistent struggle small businesses face in filling positions amid a tightening labor market. So SMBs are likely under more pressure than their larger counterparts.
That may be less true for the IT service companies serving them.