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The job market is entering 2024 on a strong note. In December, Gusto’s New Hires Pay Index – a leading indicator of competition in the job market – turned positive for the first time in over a year – meaning that employers are now paying more for new hires compared to this time last year. In December, employment growth slowed, largely due to seasonal factors, but net job growth was above last December.

  • In December, pay among newly hired workers was 0.2% higher than pay for those hired this time last year, led by increases in the index within Tourism, Automotive, and Legal.
  • SMB employment fell by 0.2% in December, a slight tick up from the 0.3% dip in December 2022. The fastest-growing industries in December were Utilities, Accounting, and Government.

Gusto’s New Hires Pay Index

Gusto’s New Hires Pay Index tracks business competition for workers in real time. It’s the change in wages paid to employees hired this month compared to a year ago. This index rose to 0.2% in December 2023, meaning businesses paid new workers 0.2% more than new hires last year, a sign of intensifying competition among employers looking for workers.

Hiring Trends

Across sectors, SMB employment decreased 0.2% in December 2023, compared to a 0.3% decrease in December last year. Driving this change was a fall in the hiring rate, which fell from 4.4% to 4.0% over the past year.

At the same time, however, layoffs are down compared to one year ago. This is a positive signal that companies aren’t actively looking to let go of workers ahead of a possible downturn.

About the data

Gusto pay and hiring trends data is derived using Gusto’s real-time payroll data from over 300,000 small and medium-sized businesses across industries and across the country. New Hires Pay Index calculates the percent change in average annualized pay between workers hired in a given month and those hired one year earlier.

Interested in learning more about these trends? Contact us at [email protected]

Tom Bowen is an Economist at Gusto, researching work and business trends in the modern economy. He received his Master’s of Economics from UC Santa Cruz. Tom currently lives in San Francisco, CA.
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