As 2024 begins, the US labor market appears to be slowing down—and whether or not a soft landing occurs depends on what happens next. A steady increase in demand for workers will keep job postings and hiring booming, while an acceleration in the pace of layoffs would speed up the decline in those measures. If the latter scenario unfolds, a recession could follow.
Despite cooling, the overall outlook for the labor market remains solid. Employers’ appetites for workers are no longer as ravenous as they were in early 2021 and 2022, but the hiring numbers remain well above pre-pandemic peak levels. Posted wage growth has stabilized across low-, middle-, and high-wage sectors, and the rampant job-switching that drove the previous hiring boom has eased.
Meanwhile, a wave of new AI tools is challenging some jobs and reshaping others. The emergence of chatbots like ChatGPT and generative AI systems is being hailed as a game-changer for the future of work, while fears about automation replacing human labor are still prominent.
The share of US jobs that are primarily remote has declined since the peak of hiring in late-2022, but it’s not as steep as one might expect given the current situation. In fact, remote-only positions are among the few categories where hiring demand has held up relatively robustly. In addition, jobs tied to companies that provide in-person services, particularly restaurants and hotels, have also continued to show strength in hiring.
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