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America could see a more cautious, competitive, and selective labor market in 2024, based on projections and insights from economic experts.
People may have found it tougher to get a job in 2023, especially after the hot labor market a year prior. People also weren't quitting as much in 2023, with Indeed arguing the Great Resignation was finished. In 2024, it may still be hard for people to find work, depending on their industry and the size of the company they're interested in.
"The job market is now showing signs of stabilization, but we expect to see continued caution in hiring on the part of employers moving into 2024," Kory Kantenga, senior economist at LinkedIn, said in a written statement to Business Insider before the new year.
Here's how the labor market looked in 2023 and what may happen in 2024.
Job opportunities were already moderating in 2023. Based on data from January to October, there were fewer total US job openings in 2023 than in 2022.
Still, the economy added jobs throughout 2023, including 199,000 in November. The unemployment rate stayed low despite some small fluctuations throughout the year. The layoffs and discharges rate had also been at or near 1%, despite worries about some layoffs concentrated in the tech sector early in the year.
There could be a more competitive job market in 2024 "as a result of fewer job openings and higher search intensity among job seekers," Kantenga said.
Nick Bunker, economic research director for North America at the Indeed Hiring Lab, told BI that the recent job market data from the Bureau of Labor Statistics "were pretty consistent with the case for cautious optimism" for 2024.
Bunker said many of the trends present "in 2023, particularly the second half of the year, that were encouraging for" continued strength in the labor market are still present.
Additionally, the most recent Fed projections from December show the median voting Federal Open Market Committee member expects the unemployment rate to be 4.1% in 2024, up from the 3.7% rate in November 2023. That's also the projection for 2025 and 2026.
Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a written statement "the second half of 2024 will be highly dependent on the job market and inflation — if both stay in the same path as they are currently on (e.g. unemployment remains low and inflation keeps slowly falling) then we can stay out of recession in the second half."
Glassdoor economist Daniel Zhao said in a recent interview with Yahoo Finance Live that "as we head into 2024, I think there's a little bit more cautious optimism about the likelihood of a soft landing."
"And so hopefully we will see employers start to open up hiring again, especially as we get into the new year and new budgets are set," Zhao continued.
Zhao said in the interview that healthcare, government, and education are areas of the labor market where hiring has been strong and should continue to be. Zhao also pointed out that people may have transferable skills between different sectors, so job seekers don't have to pigeonhole themselves to their current industry.
However, it might be hard to find the work you want in general. Josh Brenner, the CEO of Hired, said in an as-told-to essay that "employers will be more selective" and target those "who precisely meet their expectations."
But Kantenga still sees work opportunities available, especially outside large companies.
"While hiring has steadily declined across the board, there are certainly bright spots within the job market and there are opportunities if you know where to look," Kantenga said. "We know, for example, that large companies have pulled back their hiring the most over the past year — but medium and small companies have not pulled back to the same degree."
Additionally, Kantenga thinks there might be opportunities for people to move around at their current place of employment.
"One trend that we saw in 2023 that we expect to continue is companies choosing to fill open roles with existing employees, rather than opening those jobs up to outside candidates," Kantenga said. "We've seen in our research at LinkedIn that recruiters expect increased focus on retention and internal mobility for employees over the next few years, so for many professionals who might be looking for a new job in 2024, that new job could be at their current company."
Plus, there will probably be generational changes in 2024. A Glassdoor analysis found that more Gen Zers than baby boomers will be employed full-time by early 2024.
"Companies inevitably tailor their culture and their benefits to the types of workers that they are trying to attract and trying to retain," Glassdoor's chief economist Aaron Terrazas previously told Business Insider. "We know that the types of workplace culture and benefits that Gen Z values is different than baby boomers."
AI skills are also likely to continue being important in 2024.
"I've seen a notable increase in hiring requirements for experts proficient in AI and machine learning, often linked to specific geographic locations like NYC or San Francisco," Brenner said in the as-told-to essay.
Meanwhile, Kantenga said that "a massive shift in the labor market in 2024 as a result of AI" isn't expected to happen, but "we do know that companies are increasingly looking for employees who are AI literate," or people who know how to use ChatGPT or other AI tools.
The job market has been steady ahead of 2024. With a little luck, that could stay true in the new year.
