The job market cooldown of the past year has been proceeding much more slowly over the past few months, according to platform data from 300,000+ businesses. Gusto’s New Hires Pay Index, a leading indicator of competition in the job market, shows that small business owners paid 2.4% less for new workers in October 2023 compared to one year ago. But that decrease is far slower than the 7% decline experienced in June, a sign that the job market is no longer cooling down as quickly as it had earlier this year. 

  • In October 2023, pay among newly hired workers was 2.4% lower than pay for those hired this time last year, led by decreases in the index within Transportation (-10%), Accounting (-4%) and Other Professional Services (-3%).
  • SMB employment remained about flat in October, a slight tick down from 0.3% growth in October 2022. The fastest-growing industries in October were Warehousing (+2.8%), Mining & Oil (+1.1%), and Healthcare & Social Assistance (+0.8%).

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 -2.4% in October from -3.5% in September, meaning businesses paid new workers 2.4% less than new hires last year. Falling pay for new hires is a sign of continued easing competition among employers looking for workers. Though still negative the New Hire Pay Index has been trending up since June, signaling that this cooldown in the labor market may be stalling out.

Hiring Trends

Across sectors, SMB employment remained about flat in October, compared to a 0.3% increase in October of last year. Driving this change was a fall in the hiring rate, which fell from 5.5% to 5.1% over the past year, indicating business owners are not as eager to expand. 

At the same time, however, layoffs and firings remain at the same level as last year – a positive sign that companies aren’t 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]

Luke Pardue Luke Pardue was an Economist at Gusto, researching how public policies help small businesses and their workers thrive. He received his Ph.D. from the University of Maryland, where he studied the effects of government programs on disadvantaged populations’ housing and labor market outcomes.
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