The US economy may be poised for an upswing. Labor data now points to a more optimistic view of the economy’s trajectory, according to the Winter 2023-24 US Labor Market report released by Magnit, a provider of VMS, MSP, employer-of-record and other services.
“Our hiring, voluntary termination and rate-of-change data analyses indicate positive shifts ahead, as does the influx of innovation from artificial intelligence,” Dustin Burgess, senior VP of strategic advisory at Magnit, said in a press statement.
“It’s going to be a time of great opportunity for employers who prepare strategies that take advantage of the evolving labor market,” Burgess added.
Key takeaways from the report include:
- The US economy appears poised for an upswing. While some industries might face hiring decreases or layoffs in the coming months, others will likely see staffing increases. For example, layoffs for warehouse worker and material handler roles accounted for 19% of all layoffs between the third quarters of 2022 and 2023 — the largest share of any roles. In contrast, hiring for marketing and business development roles reached a two-year high in the second quarter of this year.
- Voluntary terminations are rising, and companies should prepare. While voluntary termination rates reached a three-year low in March 2023, they have risen over the past six months, according to Magnit. This trend is likely to continue should hiring volumes stabilize or increase in 2024; Magnit’s research shows hiring volume and voluntary terminations tend to have a positive correlation.
- Organizations may want to rethink their approach to layoffs. Magnit data shows that some industries have laid off workers only to rebuild a significant portion of that workforce within the same year. For example, despite significant amounts of layoffs for warehouse worker and material handler roles, hiring for these roles was up 51% in the third quarter of this year compared to the same quarter last year. This net increase in hiring amounted to 81% of all layoffs for these roles across the prior 12 months combined.
- Demand for AI skills is exploding. AI skills are no longer contained in IT/technology silos; they have spread to other fields such as finance/accounting, engineering and operation, according to Magnit. The uptick in demand for AI skills is particularly high in software engineering roles, with references to AI in job descriptions growing from 0.5% in 2019 to 3.3% this year. Magnit estimates this figure could nearly double by the end of 2024.
The report includes data from hundreds of thousands of workers across 51,000 roles in the US.