This week’s employment numbers, when compared with July’s numbers, will either affirm a sustained deceleration in labor market activity or suggest significant seasonal noise by reverting to long-term averages.
Noah Yosif
Weekly Economic Outlook
09/04/2024
Reckoning a Rebound: What to Expect for August’s Jobs Week
Markets are ready for a rebound this jobs week. Consensus estimates anticipate nonfarm payrolls to grow by 161,000 jobs and reduce the unemployment rate to 4.2%. This rebound will hinge mostly on sustained churn within several sectors that have already experienced the bulk of activity within the labor market; those include education, health care and social services, and construction. This week’s employment numbers, when compared with July’s numbers, will either affirm a sustained deceleration in labor market activity or suggest significant seasonal noise by reverting to long-term averages.
In terms of job creation, businesses are still hesitant to increase headcount given a modest dip in consumer consumption across much of the economy. And while certain sectors have supported most of the overall labor churn, their continued momentum remains accessible to a select cohort of workers. However, businesses have also shown they are in no hurry to reduce headcount in a substantial manner given previous labor shortage pains in 2021 and 2022, all of which suggest that while nonfarm payrolls might realize further slack, unemployment could stabilize rather than accelerate.
August’s numbers will not prompt the Federal Reserve to reverse course on initiating rate cuts in September, barring significant reduced hiring or accelerated layoffs. Rather, it will show that the labor market remains resilient, but ready for a cut to unleash its full potential.
Total Employment, Reported by Establishments and Households
Source: U.S. Bureau of Labor Statistics
Weekly Staffing Research Outlook
09/04/2024
For staffing firms, AI has amazing potential to streamline processes such as résumé screening. However, in addition to compliance concerns around deployment of AI tools, it could contribute to poor candidate experience stemming from concerns about AI playing a role in hiring.
Tim Hulley
Easing Concerns About AI in Hiring
With the public debut of Chat GPT now nearly two years past, it is important to examine prevailing sentiment around artificial intelligence and how it is relevant to staffing firms. According to the latest Bentley-Gallup Business in Society Report, the majority of Americans believe AI will do equal amounts of harm and good (56%). However, while the share of Americans believing AI will do more harm than good has fallen from 2023 (40%) to 2024 (31%), it exceeds the share who believe AI will do more good than harm (13%).
So why is this relevant to staffing firms? The top area of worry for Americans regarding AI is when it is used in “recommending which employees a company should hire.” More than eight in 10 Americans (85%) are extremely or somewhat concerned about this possibility—more than those who worry about AI driving a car (83%) or recommending medical (80%) or financial (71%) advice.
For staffing firms, AI has amazing potential to streamline processes such as résumé screening. However, in addition to compliance concerns around deployment of AI tools, it could contribute to poor candidate experience stemming from concerns about AI playing a role in hiring. Americans may continue to become more comfortable about AI over time, but transparency could accelerate that process—57% of Americans say companies being transparent about how AI is used would help reduce their concerns about the technology.
Recommendations for Allaying Concerns About AI
Source: Bentley-Gallup Business in Society Report
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