Fed's US Employment Outlook: Hiring Slowdown Expected In 2024

Recent surveys from various regional Federal Reserve banks indicate a potential decrease in hiring across the United States in 2024.

This trend, which could lead to moderated wage increases, is seen as a response to the Federal Reserve's measures to decelerate economic growth and manage inflation, Bloomberg reports. 

The anticipation comes ahead of the government's upcoming monthly jobs report, which is predicted to reveal a 170,000 increase in December payrolls. Early next year, economists foresee a monthly average job growth of around 80,000, significantly lower than the current quarter's rate.

Analysis of the regional Federal Reserve data suggests the central bank's strategies are beginning to impact the broader economy. Although these findings signal a slowdown, they do not necessarily predict a decrease in overall employment. 

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In the Philadelphia Federal Reserve district, encompassing Delaware, most of Pennsylvania, and southern New Jersey, a key indicator of manufacturers' employment expectations has reached its lowest point since 2009. Similarly, in New York, the proportion of service providers anticipating employment growth is at its second-lowest in three years.

Surveys from the Dallas Federal Reserve reveal that approximately 30% of Texas manufacturers and service providers consider themselves at optimal staffing levels, a seven percentage point increase since the beginning of the year, according to Bloomberg. 

According to the Richmond Federal Reserve, the expected employment in factories has dropped to its lowest since May 2020, while the service sector shows some improvement. 

Wage growth, which saw annual increases of 7% in 2021 and even higher in 2022, is projected to slow to about 4.3% next year, as per the Dallas Fed.

The Kansas City Federal Reserve reports a similar trend, with wage growth expectations falling to a three-year low.

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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