Anticipated U.S. Employment and Hiring Trends According to Indeed's 2025 Report: A Look at a Potential Soft Economy Transition
The labor market in October 2024 demonstrated a mix of positive and challenging trends. According to the Bureau of Labor Statistics, 23.8% of employees teleworked at some point during the month, marking a 4 percentage point increase year-over-year. This growth suggests a persistent shift towards remote work in the post-pandemic era.
While job gains are slowing, averaging 180,000 jobs per month through the first eleven months of 2024, they remain above the 100,000/month pace needed to keep up with population growth. The labor market has cooled, with unemployment and layoffs remaining low, indicating a stable economic climate.
Wage growth, however, has been a bright spot. For much of the year, wages have exceeded the rate of inflation, leading to increased real spending power for many workers. The quits rate, a measure of job-hopping, reached its lowest ratio since July 2015, before bouncing back slightly to 2.1% in October.
The share of job postings requiring at least a bachelor's degree fell to 17.6% in October 2024, from roughly 20% prior to the pandemic. This decline in education requirements hints at a more flexible hiring future. Additionally, the share of job postings with a specific experience requirement has also decreased, from 40% in October 2022 to 32.6% in October 2024.
The use of GenAI tools in the job market is still minimal, with only about 2 in 1,000 jobs nationwide mentioning any of a basket of GenAI-related terms as of the end of October. The labor force growth slowed in 2024 to a monthly average gain of 76,000 workers, well below the strong numbers of previous years and the pre-pandemic average of 136,000.
Foreign-born workers accounted for about 25% of labor force growth between November 2022 and November 2023. Over the past year, the foreign-born labor force grew by an estimated 765,000 people, while the size of the US-born labor force declined by more than 500,000. The Congressional Budget Office projects that net immigration will fall from an estimated 3.3 million in 2024 to 1.1 million by 2027 - a return to pre-pandemic trends.
Federal job openings stood 11% above February 2020 levels on the last business day of October, despite cooling from last year. The share of job postings advertising salary information climbed 15.7 percentage points from September 2022 to September 2023. As of October 2024, 61% of postings noted at least one benefit, up from less than 40% during the depths of the pandemic in the second half of 2020.
The Federal Reserve's recent rate cuts show that policymakers are throwing more support behind the labor market. Unemployment crept up in 2024, from 3.7% in January to a high of 4.3% in July, but has decreased slightly to 4.2% since peaking. Hires rates are below pre-pandemic (February 2020) levels in 9 of the 13 major industries defined by the federal government.
Looking forward, the labor market is at the beginning stages of a race between the challenges posed by deteriorating demographics and an aging workforce on one side, and the promise of AI tools to boost productivity and unleash innovation on the other. In 2025, if conditions for continuous economic growth persist but labor market potential declines in various sectors, a modest economic growth of around 0.2% in Germany is expected, accompanied by stagnation or slight decline in employment due to demographic factors, with private investment remaining weak and growth driven primarily by public fiscal stimulus.
Foreign interest in US job postings from abroad has mostly plateaued after a post-COVID spike. The Indeed Job Posting Index was down 10% over the year, though still 10% above pre-pandemic levels. The labor market remains a dynamic and evolving landscape, with remote work, wage growth, and immigration trends shaping its current state.
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