Economy-wide breakdown
- The fourth quarter of 2024 fueled hopes for strong labor market growth in the new year. While October’s jobs report fell significantly below expectations due to the impact of Hurricane Milton, November and December exceeded forecasts. Over the past three months the job market has grown at a respectable average of 170,000 jobs—an encouraging sign given the backdrop of still-high interest rates.
- While overall job growth remains steady, the labor market is a far cry from the peaks in the early 2020s, which led to the “Great Resignation”. Now, fewer workers are quitting their jobs, leading to fewer backfill openings and ultimately driving down the hiring rate. Despite this slowdown in quitting and hiring, layoffs have not risen significantly, creating a relatively stable environment for those currently employed.
- For workers with jobs, this means consistent wage growth and a moderate selection of open positions to explore. However, the picture is less optimistic for unemployed workers. The labor market has become increasingly challenging, with the job-finding rate—the percentage of unemployed workers securing jobs each month—declining steadily over the past six months.
- As we look ahead to 2025, steady labor market growth is expected to continue. However, policy uncertainty under a new administration will be a critical factor in shaping the trajectory of the labor market. Decisions on fiscal and monetary policy, as well as regulatory changes, could significantly influence hiring, wages, and overall economic momentum in the year ahead.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
Both the financial and insurance markets have faced significant headwinds over the past year. Despite the Federal Reserve cutting interest rates three times, long-term bond yields are on the rise, signaling investors’ expectations of higher future inflation. Policy uncertainty looms large, with the potential to trigger another wave of price hikes. Projections for rate cuts in the new year have softened considerably compared to the optimism of August and October, with only slight reductions now anticipated.
In the insurance sector, the challenges are even more acute. A series of devastating wildfires in Southern California destroyed thousands of structures, intensifying the strain on an already fragile housing insurance market still grappling with the fallout from hurricanes in the Southeast. For both sectors, 2024 was a year of volatility, and the outlook suggests more uncertainty ahead.
The combined pressures of financial market instability and extreme weather events have kept employment growth in the finance and insurance sectors subdued. In December, the industry averaged just 6,500 new jobs, reflecting a pattern of growth that has oscillated between gains and losses over the past two years. This volatility mirrors the unpredictable nature of financial markets, where black swan events and sudden economic shifts can dramatically alter hiring demand.
Within the major financial & insurance subsectors, demand for securities and commodities traders is the most robust, with growth of 1.1% over the year. Insurance workers’ growth, while muted, is still positive at 0.4%. Grappling with elevated mortgage rates, real estate employment has contracted 0.8% from the year prior, a trend that will likely persist into the new year. Similarly, employment in credit intermediation has contracted 1.3%, as there are far fewer people needing loans.
Wage Trends
Wage growth in the finance and insurance sector reveals significant variation across subsectors. Credit intermediation leads with a 7.3% increase, followed by securities and commodities traders at 4.4%. Insurance workers saw steady gains of 2.8%, while real estate workers experienced the weakest growth, with wages rising just 1.3%.
Openings and Turnover Trends
As the sector grapples with the prospect of higher inflation in the new year, job openings in finance and insurance have steadily declined, now sitting at 4.8%. Worker mobility has also slowed, with quits falling to 1.1%, below pre-pandemic levels. This reduced turnover has pushed hiring activity down from its peak of 2.7% to just 1.8% in December. Despite the weaker hiring environment, there is a silver lining: layoffs remain low at just 0.5%, signaling some stability in the sector.
Recruitment Marketing Trends
The term “Long” or “ATS Apply” refers to the conventional application process, requiring applicants to manually submit their tailored application documents and personal details through the company’s website or an applicant tracking system (ATS). In many cases, applicants are required to create a company-specific account.
On the other hand, “Easy Apply” refers to a swift application process on a job board, often conducted through a smartphone. With a single click, essential information like the resume is transmitted directly to the company. Due to the simplicity of this application method, easy-apply metrics are not directly comparable to those of the long or ATS apply. The metrics are therefore presented separately.
Long Apply
After months of decline, recruiting costs in finance and insurance have leveled off. The median cost-per-click (CPC) for both industries has remained steady around $1 throughout the fall, while the median cost-per-application (CPA) hovers near $12. This stabilization is partly due to a slowdown in the growth of application rates, which exceeded 8% for both sectors last fall. As application activity steadies, recruiting costs appear to have settled into a new equilibrium.
Easy Apply
Mirroring trends in traditional apply methods, easy- (or short-) apply recruiting costs have also stabilized. Finance roles see a slightly higher cost-per-click (CPC) at $1.07, while insurance remains lower at $0.80. Cost-per-application (CPA) has held steady around $5 for both subsectors, positioning easy-apply as an attractive, low-cost option for recruiters. Application rate growth has plateaued, but job seekers in both sectors continue to finish applications at an impressive one-in-five rate, highlighting the efficiency of streamlined processes.
Recruitment Marketing Forecast
Given the uncertainty around the inflation outlook in the new year, our cost-per-application forecast predicts that prices will remain mostly stable over the next six months, but the impact of new fiscal policy looms large.
What does this mean for Finance and Insurance?
The finance and insurance sectors are facing persistent challenges from market volatility and the lasting impact of extreme weather events. Employment growth remains sluggish, with hiring activity slowing as job openings and worker mobility continue to decline.
Recruiting costs have stabilized and streamlined application methods remain a cost-effective way to attract talent. Looking ahead to 2025, the outlook remains uncertain. Inflationary pressures and fiscal policy changes could shape both job creation and wage trends in the coming months.
Forecasting Methodology
Cost-per-application (CPA) is forecasted one year ahead using the previous two years’ worth of one-month moving average data. A combination of ARIMA, exponential smoothing, and seasonal naïve models are used to create an ensemble forecast. The forecast provides the 95th percentile confidence interval, indicating the likelihood that each value will be within the CPA range provided.
