
2024’s Economy Lays the Groundwork for a Steady 2025
By Nich Tremper
Luke PardueEconomist, Gusto August 3, 2022
Amid news of rising prices and shrinking GDP, the labor market has remained a bright spot in an increasingly gloomy economic landscape. Employment growth has remained strong, worker’s earnings are rising, and employees still feel confident enough in their job prospects to quit work at near-record rates. Whether or not employment and wages can continue to grow, however, remains an open question, as brake lights appear in other parts of the economy.
The latest data from Gusto’s Economic Trends Tracker – through the end of July 2022 – indicates that the labor market has remained strong into the second half of this year, though growth has been slower than the accelerated pace seen in 2021. This slower pace of growth has been driven mainly by a reduction in hiring by companies, with Personal Services sectors such as Retail, Arts & Entertainment, and Food & Beverage seeing the largest slowdown. While companies are seemingly scaling back new headcount it is important to note that we have not seen a broad increase in terminations despite a few high-profile layoffs making headlines in recent weeks. In fact, our data shows robust wage growth nationally that continued through July.
As employers navigate economic uncertainty amid a historic labor shortage and inflation, they remain intent on retaining employees. A decline in hiring rates combined with accelerated wage growth, illustrates how an unprecedented labor market and record high inflation are forcing businesses to continuously adapt their approach. In the past month we’ve seen:
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.Read More
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