Introduction
Welcome to Recruiting Realities! Today we’re diving into the May 2024 US jobs report. As always, we’re joined by our resident labor market expert, David Garrett, to break down what these numbers mean for the economy and recruitment.
From healthcare’s continued dominance to the transportation sector ramping up for summer, this report has plenty to unpack – including a surprising rise in unemployment after a historic run below 4%.
Yazad Dalal: Hi everyone! I’m Yazad Dalal, Chief Growth Officer here at Joveo and welcome to Recruiting Realities, where we bring to you the latest developments and insights in recruitment. Today we’re talking, as always, to our in-house labor market economist, David Garrett, about the US jobs report for May 2024 – just came out last Friday. Hello, David.
David Garrett: Hey, how’s it going? Great to be here.
Yazad Dalal: David, the most recent US jobs report that came out for the month of May said that the US labor market gained 272,000 jobs in May, way more than forecast. The unemployment rate’s now been below 4% for 30 months. I think that’s the longest stretch in half a century, but the unemployment rate also rose to the highest level since January 2022. Breaking a streak, I think it was 27 straight months where it had stayed below 4%.
I think that’s the longest sub-4% run since the 60s. And all the major industry groups are now back above where they were pre pandemic – back above those employment levels. In fact, there was one lone, laggard – leisure and hospitality. But even that, because there was a revision to the numbers in April, even that is back above its high watermark from before the onset of the pandemic. So, as we talked about last month, that group had suffered the largest losses during the pandemic. And, for our listeners, at Joveo we publish Interactive Insights across all major occupations in the US. You can check that out on our website, joveo.com/interactive-insights.
So, David, I have lots of questions. Let’s get started. What are some of your major takeaways from the May 2024 BLS jobs report?
David Garrett: Yeah, it was kind of, as Bill Adams to give credit for the statement, he’s a chief economist at Comerica Bank, he mentioned it was basically a Rorschach test for economists, which, you know, as you look at the inkblots, you kind of see what you want to see in some ways. As you mentioned, you know, unemployment increased to about 4% in May of 2024, which is the highest it’s been in, I think, the past two years, roughly.
And it was mainly driven by people unable to find work after returning to the labor force, which kind of continues the trend we discussed last month where companies are generally keeping employees and employees are not leaving as often. So, for those who really want to see an optimistic picture of the economy, the consistent job growth, the large growth in payroll is a sign of strength. But on the other hand, those focusing more on the negative will talk about this increase in the unemployment rate to 4%, as well as the rise in part-time employment and dip in temporary employment services or temporary employment workers, which often are very broad signals of job market weakness.
Yazad Dalal: Yeah. And I think, by the way, you know, past is prologue or history is the best teacher. I remember 25, 30 years ago when I was working at Monster.com, 4% was considered like an amazing bellwether for the economy. So, for people to complain that it’s now spiked to 4% sounds a little funny, if you know a little bit of what it’s been like the last 30 to 50 years, David, the largest job growth overall in this report was in healthcare – it’s a crazy 68,000 jobs added. I think the next closest was 43,000 jobs which were added in government and public sector. But from your perspective, what’s driving that healthcare growth?
David Garrett: Yeah, I mean, healthcare has consistently been huge, right? I think it’s like, what was it? 13K new jobs in doctors’ offices, 20K in home and healthcare services or home healthcare services. Hospitals added something around 15,000 new jobs and nursing residential care facilities was over 10,000. So, just consistently all around massive gains in the healthcare sector. And it’s kind of in the backbone of a lot of hiring for the past two and a half years. Roughly, of like 18% to 19% of the jobs added have been in healthcare. And it’s consistently just the, you know, the aging population continuing to drive demand for care, rising insurance coverage, the Affordable Care Act, giving more people access to healthcare. I really, the consistent need for nurses and doctors, I don’t see stopping anytime soon. And I think that going forward you’re only going to continue to see it be at top because it’s such an acyclical labor market.
Yazad Dalal: And David, I know we’re always talking about the nursing shortage, but we also talk a lot about the trucking shortage. And I saw that the report showed that transportation and warehousing also added over 10,000 jobs. Tell us a little bit more about that.
David Garrett: Yeah, I mean, we saw a pretty big jump in the wages. The wages for transportation employees moved to around $29.68 on average, which is, I believe, the highest that it’s ever been, and that’s nationally. And a lot of this growth has been driven by a specific industry or a specific subsector of that economy or that labor market, which is reefers and dry vans. Not the reefer madness kind. It’s types of trucks that deliver commodities like food, beverages, produce to your local stores like in Texas.
Yazad Dalal: Delivering refrigerated goods not reefers – ya, we got it!
David Garrett: Yeah, exactly. Yeah. And so, you know, now that we’re moving into summer, demand for drivers who, you know, to deliver harvested produce, because it’s such a quick turnaround time throughout the country, particularly in the South, is ramping up. And so more and more drivers are needed, resulting in shippers needing to pay increased rates to secure enough drivers to meet their needs, you know.
Yazad Dalal: Excellent. Well, David, I want to thank you very much and to thank all of our listeners out there. Be sure to check us out at joveo.com and we’ll see you next time.
David Garrett: Take care.
Conclusion
That wraps up our look at the May 2024 jobs report. From healthcare’s steady growth to the unique challenges in transportation and warehousing, the US labor market continues to evolve in fascinating ways.
Big thanks to Yazad Dalal and David Garrett for sharing their insights and to you, our listeners, for tuning in. Until next time, you’ve been listening to Recruiting Realities!
