With 2024 well underway, the economy continues to show strong job growth in Were analysts surprised by the January labor numbers? Yes, many were, which is surprising to Brian Miller, CEO of Patrice & Associates, who is living the numbers in the North American recruiting firm he leads. "This is what we experience day in and day out," said Miller. Conscious Capital Growth (CCG), a business accelerator, caught up with Miller to learn more about where we’re heading.
CCG: What were the numbers this month versus the predictions?
Miller: January 2024 got off to a rousing start with the US economy creating 353,000 new jobs, whizzing by economists’ prediction of just 185,000. This is even higher than December’s revised number of 333,000, which was 126,000 more jobs than originally reported. The unemployment rate continues to hover at 3.7%, indicating the tight labor market won’t let up anytime soon.
CCG: How does this compare to last year at this time?
Miller: In January 2023, total non-farm payrolls increased to 517,000 compared to 353,000 last month. This is still a solid showing, however, at a more moderate pace. The unemployment rate in January 2023 was 3.4% vs. a still tight 3.7% in January 2024.
CCG: Are the current stats affecting all sectors of the economy?
Miller: Looking at the big picture, Julia Pollak from Zip Recruiter reported that just three sectors created over 92% of the jobs from June to December 2023: healthcare, the government, and leisure and hospitality.
CCG: With the actual numbers are in, is Ms. Pollak’s report still holding true?
Miller: The freshest set of data suggests that the lion’s share of the increase occurred in healthcare which added 70,000 jobs. But, other industries posted a few surprises, too, when compared to the 6 months. Professional and business services added 74,000 jobs, and retail trade increased by 45,000 jobs. The government continued its growth trend by adding 36,000 jobs. This sector has been late to the party when it comes to making up for jobs lost during the pandemic.
CCG: What about Leisure and Hospitality?
Miller: This sector remained flat since December because it had already made up most of its jobs lost during the pandemic. It's a sector that is more normalized so we can expect as winter turns into spring and summer, jobs will increase as more people travel, take vacations, eat out, etc. Also, since turnover in this industry is very high, there is movement regardless of the number of new jobs created. According to the Bureau of Labor Statistics, the hospitality industry has the highest turnover rate of any industry. Thus the need for staffing in this sector always remains high.
CCG: How do these trends relate to the economy, interest rates, and inflation?
Miller: ADP's chief economist Nela Richardson told Newsweek on January 31, “The economy has softly landed and is relaxing at its destination, with two things happening—a slowdown in hiring, but still solid, and wage pressures easing, which also helps the case to keep inflation under control.” With this news, no doubt the fed will continue to remain in a holding pattern on interest rates.
CCG: Any last thoughts?
Miller: In general, we will continue to see tight labor demand. However, we have certainly begun to stabilize, with a more moderate job growth pattern overall, particularly in hospitality. With the labor market tight, every industry is experiencing the challenges of finding top talent. That’s why Patrice & Associates continues to grow and help more companies. Recruiting isn’t something businesses can effectively do as effectively on their own as they used to. Particularly when it comes to managerial talent and above, it's still a competitive market out there for talent. Just as in real estate, when the inventory is tight, many houses will receive multiple offers. That’s the environment we’re in with the labor pool. Top talent has choices.