Economy-wide breakdown
- The third quarter of 2024 saw a continuation of the slowing job market trend, with lower job growth and rising unemployment. Both July and August’s initial reports fell short of market expectations, heightening concerns about a potential labor market recession. However, September’s stronger-than-expected gain of 254,000 jobs has alleviated some of those fears. Still, the broader narrative remains: the labor market is growing at a slower pace compared to the first two quarters of the year.
- Unemployment gradually increased this quarter, driven primarily by an influx of new workers entering or returning to the workforce, rather than by job losses. The overall rate of hiring activity has significantly declined, near 2013 levels as workers are quitting far less resulting in a low turnover environment.
- Wage growth continues to decelerate, now below 4% and trending towards 3.5%.
- Inflation has continued to cool, and amid growing concerns about a weakening labor market, the Federal Reserve cut interest rates by 50 basis points in September. This move signals the central bank has confidence that inflation is on track to reach the 2% target and fears that current monetary policy is too restrictive and requires easing to boost employer demand for hiring.
Read our economy-wide breakdown of the latest numbers.
Employment Trends
For the finance and insurance sector, the first half of the year was largely forgettable, with nearly 43,000 jobs lost as high interest rates and post-pandemic office vacancies put pressure on the industry. Additionally, climate change continues to take a toll on commercial real estate, driving insurance costs to unprecedented levels. Two major hurricanes recently battered Florida’s coastline, highlighting how unpredictable weather patterns are reshaping the way systemic risk is priced in the insurance market. As climate-related events become more frequent, the sector will face increasing challenges in adjusting to these new risk factors.
Within the major subsectors of the financial industry, credit intermediation continues to decline, shedding an average of 2,700 jobs over a three-month period. In contrast, demand for insurance workers remains strong; the sector added 4,000 jobs on average over the same period. The real estate and securities sectors are still growing, but at a slower pace, with real estate adding 2,900 jobs and the securities sector adding 430 jobs.
Although the entire financial services sector is due to benefit from interest rate cuts, for real estate agents this is doubly beneficial as mortgage rates will slowly unwind as well, bringing potential homebuyers back into the market.
Although the finance industry has been shedding jobs over the past year, the decline may have slowed. Real estate and securities are growing, albeit at a subdued pace, with growth rates of 1.8% and 1.4%, respectively. The insurance sector has also expanded at a modest rate of 1.5%, consistent with its historical norm over the past two years. However, credit intermediation remains a notable weak spot, declining by 1.8% year-over-year, reflecting continued challenges in that subsector. While some areas are stabilizing, the industry’s recovery remains uneven.
Wage Trends
Despite slumping employment growth, wage growth in credit intermediation has been robust, reaching 6.5%. This may partly be due to a compositional effect, where the departure of lower-wage workers pushes up the average wage for those remaining. In contrast, wage growth for insurance and securities workers has slowed, though it remains positive at 2.7% and 2.6%, respectively. Real estate workers have seen the weakest wage growth, with an increase of just 0.8%, reflecting softer demand in that subsector.
Openings and Turnover Trends
Job openings in the financial industry continued their downward trend in the third quarter, hitting a near post-pandemic low of 4.0%. Despite this decline, hiring has remained stable at 2.4%. Quits and layoffs are also holding steady, at 1.2% and 0.8%, respectively. This suggests that while fewer new opportunities are emerging, employers are holding onto their existing workforce, reflecting caution in the face of economic uncertainty.
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
Recruiting costs have been on the downward trend for finance and insurance but have recently stabilized. The median cost-per-click for finance is just under a dollar at $0.95 and for insurance at $0.78. Click prices seem to have reached a steady state, not moving up or down substantially for several months now.
Application rates grew throughout the first half of the year but have hit a wall recently. The median apply rate in finance ticked down to 7.9%, while insurance is flat at 7.5%. Much of the cost savings seen in 2024 due to higher conversion may soon end as competition increases, and job seekers have more opportunities.
Finance and insurance have seen relatively stable, low-level CPAs. Finance CPAs have hovered around the $13 dollar range over the summer, at $13.54. Insurance CPAs have also changed little, at $10.62.
Easy Apply
Easy apply CPCs are not all that different from long apply—it’s hard to influence this measure of interest. In finance, CPCs have not moved much, now at $0.72. Likewise, for insurance they’ve slightly fallen to $0.54.
Apply rates for easy or short apply methods have grown substantially over the past two years but have recently plateaued. Finance apply rates fell below 20%, down to 19.5%. Insurance apply rates also fell slightly to 20.0%.
CPAs continue their downward descent as easy apply demonstrates its cost-effectiveness for applications. Finance CPAs are down to $3.11 and Insurance $2.34.
Recruitment Marketing Forecast
Using Appcast’s weekly historical CPA data, Recruitonomics has created a six-month forecast of (long apply) cost-per-application for the finance and insurance sector. Finance CPAs are expected to increase slightly for the remainder of 2024. Insurance CPAs will continue to fall moderately for the next 6 months.
What does this mean for Finance and Insurance?
The finance and insurance sectors faced significant challenges in 2024, with nearly 43,000 jobs lost due to high interest rates and persistent commercial real estate vacancies. However, the demand for insurance workers remains strong, and real estate and securities sectors are experiencing modest growth. While job openings have reached post-pandemic lows, hiring has stabilized, suggesting employers are cautious but maintaining their workforce.
Recruiting costs have also leveled off, with cost-per-click and apply rates holding steady. Looking ahead, interest rate cuts may provide a boost, especially in real estate as mortgage rates fall.
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.
