Introduction
Welcome to another episode of Recruiting Realities! I’m Yazad Dalal, Chief Growth Officer at Joveo, and I’m excited to have our in-house labor market economist, David Garrett, back with us. Today, we’re diving into the US jobs report for May 2024 to uncover industry-specific insights – from the resilient healthcare sector and its steady growth to the evolving dynamics of manufacturing and retail. Whether you’re curious about wage trends or navigating shifts in consumer behavior, this episode has you covered.
Yazad Dalal: Hi everyone, I’m Yazad Dalal, Chief Growth Officer here at Joveo, and welcome to Recruiting Realities, where we bring you the latest developments and insights in recruitment. Today, we’re talking to our own in-house labor market economist, David Garrett, about the US jobs report for May 2024. David, how are you?
David Garrett: Good! How’s it going? Great to be here again.
Yazad Dalal: I’m great too. David, the leisure and hospitality sector was the poster child for employment devastation during the pandemic. I think it lost half of its workforce, a massive 8 million jobs in just two months. But the March jobs report this year seemed to indicate that the sector had finally recovered to pre-pandemic levels. However, now in the May report, we see that’s not quite true. Leisure and hospitality are just shy of the 16.9 million employees that we had in February 2020. So, almost there, but not quite back.
I think the May report had a lot of variations across industries. I’d love to dive into those with you in just a moment, but for our listeners at Joveo, we publish Interactive Insights across all major occupations in the US, and you can check them out on our website: joveo.com/interactive-insights.
So David, the healthcare sector in particular has shown resilience I think despite a lot of economic fluctuations. What specific job growth did we see in healthcare in this report? And what do you think are some of the reasons for that trend?
David Garrett: Yeah, so recently, we saw 56,000 jobs added last month, which is roughly in line with the industry’s average, you know, about 63,000 over the past 12 months. This expansion consistently underscores the sector’s resilience and persistent demand. You know, and its being healthcare, an aging population, there’s ongoing public health needs in the US, and also many nurses and doctors who have left the industry, there’s always going to be, consistently going forward, be a much higher need for people to fill those roles than prior to the pandemic.
Yazad Dalal: So obviously, we know that’s a sector that’s in demand. Healthcare workers are in demand. How does that impact wage growth in that sector? And maybe, what other future trends can we expect?
David Garrett: Yes, so I apologize in advance. There are going to be a lot of numbers here, but I’ll do my best. So just try to follow me through.
Yazad Dalal: Throw ‘em at us!
David Garrett: So yeah, I’ll do my best. So, wage growth in healthcare has consistently remained pretty robust. Q1 showed an increase of 4.7% year-over-year, which has outpaced inflation, which means that this industry is consistently providing stable income for workers.
Although one thing I would note is that the growth is slower than we have seen in the previous quarters. And the first time that the growth has gone below 5% since Q4 of 2021, which, you know, everything spiked as things started reopening.
So I would, you know, for talent acquisition and things like that and retention, the industry is going to continue to remain competitive. Wages will likely stay high within this industry. And things may be beginning to slow down a bit, but regardless, it has consistently remained a steady, growing industry among broader economic uncertainty.
Yazad Dalal: That’s in healthcare. Then, if I switch to manufacturing, we know the manufacturing sector has had lots of mixed signals in the last few months. Give us a few insights into the employment changes you saw in manufacturing out of this report.
David Garrett: Yeah, manufacturing has been fairly slow compared to a lot of other industries.
Well, the sector, we got a very mixed report last month or for this month. It’s an increase of roughly 20,000 jobs, indicating some recovery, some promise that things will be picking up. But employment levels, in general, for that sector still remain below pre-pandemic levels. And so the modest growth reflects consistent ongoing challenges, supply chain disruptions, technological advancements, and also the fact that many people left manufacturing for other industries after the pandemic.
Yazad Dalal: And then what are some of the challenges you think or opportunities currently facing the manufacturing industry? And I’m thinking especially in light of recent policy changes.
David Garrett: Yeah, I really think that a key takeaway, particularly with policy changes such as the CHIPS and other sort of focus on high… What’s the word I’m looking for?
High-skill manufacturing jobs that are requiring, like, development of things like computer chips. You know, there’s a lot of focus needed on upskilling workers and adopting advanced manufacturing technologies to help the US consistently remain competitive on the global scene for those types of positions or those types of industries. You know, this can come from further installments of CHIPS, other things like that, and this is like a two decade long program, as well as investment and training programs and partnerships with educational institutions, things like that can really help evolve the skills required needed for the workforce to meet the demand of future technology industries.
Yazad Dalal: Got it. Now, let me switch again. Looking at retail we have tons of clients in the retail space, obviously very significant from a recruitment perspective. Tell me a little bit about retail employment. We think that we know that there’s been a seasonal boost, I think alongside some pretty significant e-commerce growth what are some of the key factors driving that trend over the last few months?
David Garrett: So similar to manufacturing, we did see a little bit of a rebound, you know, we got I think it was roughly 20,000 jobs in April for retail specifically, which is above, well above the monthly average of 7,000 over the past 12 months.
I do think a lot of it is originating from the fact that people find it easier to get part-time jobs and a lot of part-time jobs are also paying more than they were just four or five years ago. You know, and you can kind of see that that’s part of what’s going on because there was also a decline of the average number of hours worked each week in the US which is typically indicative that people are moving towards part-time work as opposed to full-time. You know, there has been that 7% increase in online retail spending but a lot of that is really being driven by a shift towards cheaper products – everybody’s buying from Shein now as people keep telling me. It’s very likely that many consumers are feeling that bite of inflation and increase in their grocery cost which increased 16% between January and April. That’s also something I’ve noticed in my own grocery bills every month.
So, you know, if someone’s wages are not keeping up with inflation or the increase in cost of living, it really only just makes sense that they would resort to online shopping to find the best deals, cheaper goods and things like that to maintain their monthly budget.
Yazad Dalal: Well, thanks for sharing all of that information, David.
I think we’re going to see more and more shifts across the economy, the labor market, and consumer behavior over the next several months, especially as we approach the election here in the US. Thanks for joining me today. And to all our listeners, thank you as well. Be sure to visit us at joveo.com to learn more. Talk to you next time!
Conclusion
That wraps up today’s discussion on the May jobs report. From the near-recovery in leisure and hospitality to the growing demand for upskilling in manufacturing, the labor market continues to reveal fascinating trends. Big thanks to Yazad Dalad and David Garrett for sharing their expertise and to you, our listeners, for tuning in.
