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
Despite lackluster performance in October, accommodation and food services netted 21,500 jobs in Q4 2024. This sector has experienced deceleration in post-Great-Resignation period, as observed in the rest of the labor market. But persistent demand for services, paired with comparatively strong wage growth among lower-income occupations, has produced a better outcome for job growth than, say, professional and business services.
Within accommodation and food services, the lion’s share of job growth has occurred in caterers & mobile food services subsector, increasing by 10.6% year-over-year—though the subsector saw a pronounced downturn in Q4. Meanwhile, employment by hotels & motels also slowed visibly in Q4, even if the deceleration has been more consistent over the same period (+1.3%).
By contrast, employment among alcoholic beverage drinking places has recovered somewhat in recent months after a slump earlier this year, netting a 4.9% increase year-over-year. Meanwhile, full-service restaurant employment also recovered slightly in Q4, even if its annual growth was the most muted (+0.8% YoY).
Wage Trends
On the wage front, only alcoholic beverage drinking places can be seen to have recovered at all in Q4—though not nearly enough to offset precipitous declines in the first half of 2024. While wage growth also fell off for full-service restaurants and hotels & motels, they remained stagnant in Q4, and wages for caterers & mobile food services declined enough in Q4 to offset their gains earlier in the year. Among these subsectors, only full-service restaurants can boast wage growth consistent with pre-pandemic levels.
Openings and Turnover Trends
While layoffs and discharges have remained stable and well below pre-pandemic levels, Q4 saw openings, hires, and quits tick up briefly and then level off in December. With the exception of job openings, which are slightly higher, these indicators are now more or less consistent with their pre-pandemic values.
Recruitment Marketing Trends
In the following section we will refer to two distinct application methods:
A “long” or “ATS apply” is typically a manual application process in which jobseekers must submit individually tailored documents and details through a company’s applicant tracking system (ATS), often using a company-specific account.
A “quick” or “easy apply,” by contrast, typically only requires a single click to transfer essential information to that company and can be much more easily completed with a smartphone.
Because the volume and quality vary so dramatically between application methods, Appcast presents these metrics separately.
Appcast’s sectoral distinctions differ slightly from those of the Bureau of Labor Statistics. Namely, the accommodation subsector will be referred to as “travel and tourism” in this section that details key recruitment metrics.
Long Apply
As far as longer-form applications are concerned, most metrics experienced pronounced bifurcation between the food service and travel & tourism categories as hiring conditions appeared to soften for the former and harden for the latter. Cost-per-click ticked up for both food service and travel & tourism (now at $0.85 and $1.38, respectively), though travel & tourism’s increase continues an upward trend throughout 2024 while the increase for food service is only interrupting a largely flat trend over the same period.
More importantly, that increase in food service CPCs translated into just a plateau for apply rates (now at 9.4%), while apply rates travel and tourism (now at 5.9%) declined more precipitously.
Meanwhile, cost-per-application seems to have been largely unaffected across food service as moderate deceleration continues (now at $8.95). Meanwhile, travel & tourism CPAs have declined markedly over Q4 (now at $21.22)—though not nearly enough to offset a dramatic rise since September.
Historically, food service has enjoyed softer hiring conditions compared to travel & tourism—but increasing CPC, stagnant/declining apply rates, and low quits across both segments could indicate that jobseekers are more interested in “window shopping” than job switching, at least for now.
Easy Apply
Meanwhile, quick-apply data has been less erratic over the past few months, mostly elongating trends which started earlier this year. Food service cost-per-click, for example, moderated slightly in Q4 (now $0.89), but is more or less following its three-month moving average. Similarly, travel & tourism CPC declined more dramatically (now at $0.88) but is still about where it was six months ago.
Quick apply rates for food service, meanwhile, declined in Q4 (now at 25.5%)—though the three-month moving average shows these rates remain elevated compared to 2023. Quick apply rates for travel and tourism, which appear to be more prone to seasonal fluctuations, recovered after declining dramatically in Q3 (now at 13.6%).
Despite more CPA volatility in travel & tourism (now at $5.89), its three-month moving CPA average has held steady for the past six months. Meanwhile, CPAs for food service have moderated somewhat after increasing steadily since August (now at $3.46).
Recruitment Marketing Forecast
As far as the next six months are concerned, Appcast’s historical CPA data suggests that decelerating trends of 2024 are likely to continue into 2025. We forecast a decline of food service CPAs more or less commensurate with what we’ve observed over the past 12 months—and while historically higher volatility in travel & tourism allows for more movement in either direction, we don’t expect CPAs to far exceed those of the past six months even in the worst-case scenario. That said, there is a notable wild card in the Trump administration’s proposed tax, tariff, and deportation policies—which would certainly impact accommodation and food service if enacted in the next six months.
What Does This Mean for Accommodation and Food Services?
Overall, Q4 recruitment marketing data shows little change in the accommodation and food service sector, which continues to benefit from lower CPAs and apply rates stronger than many other industries. Although employment in this sector still lags slightly below its pre-pandemic levels, recent job growth combined with low quits and layoffs speak to its resilience. Taxes, tariffs, and deportations notwithstanding, employers with vacancies remain in a particularly good position to fill them going into 2025.
Forecasting Methodology
Cost-per-application (CPA) is forecasted two quarters 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 both the 95th percentile confidence intervals, indicating the likelihood that each value will be within the CPA range provided.
