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
Manufacturing activity continued its decelerating pace in the third quarter this year, as the industry lost a total of 24,000 jobs. Previously, in the second quarter, the industry lost 3,000 net jobs as the bite from high interest rates set in. However, the decision from the Federal Reserve to reduce rates in September should reinvigorate optimism that growth could return in 2025. We recently published an article detailing why manufacturing is poised to have a better year, especially in the high-tech sectors of transportation and chip production.
All the job losses were concentrated in the durable goods subsector of manufacturing, with a net loss of 28,000. For nondurable goods production, growth was weak, but positive at 4,000 net new jobs.
Food production growth led the way, adding 2,930 jobs over a three-month period. Machinery, computer, and transportation production all dipped into negative territory, losing 130, 870, and 5,010 jobs respectively (three-month average).
The decline in the growth rate across all the major manufacturing subsectors seems to have subsided, outside of transportation equipment (up 1.6% from the year before). Food manufacturing growth accelerated to 1.4%, while for computer and machinery production remains in negative territory at –0.8% and –0.7% respectively.
Wage Trends
While overall employment growth in manufacturing has been weak, wage gains for workers have been strong. Wages for computer parts workers have steadily risen throughout the year, reaching a recent peak of 7.5% year-over-year. Similarly, wages for machinery workers are nearing a high, growing by 5.1%. In contrast, wage growth for food and transportation workers has slowed, with hourly earnings now at 3.4% and 1.6%, respectively.
Opening and Turnover Trends
After months of consecutive declines in job openings, the downward trend seems to have halted. Job openings stabilized at 3.8%, while hiring activity dipped slightly to 2.4%. Quits and layoffs remain steady at 1.6% and 0.7%, respectively.
Despite a slowdown in hiring demand, companies remain cautious about laying off workers, likely remembering the challenges of the tight labor market in 2020 and 2021. This suggests that employers are reluctant to part with talent, even as the pace of hiring cools.
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. These metrics are therefore presented separately.
Long Apply
As the decline in job postings has ebbed, so has the decline in recruiting costs. For cost-per-click, it has ticked up slightly to $0.80 (three-month average).
Apply rates continue to rise as job seekers enter the market. For manufacturing, they’ve hit an all-time high of 7.5% last month, with a strong 6.8% three-month average.
Cost-per-application has not changed much in the past quarter as competition has neither increased nor decreased substantially, settling in at $12.25.
Easy Apply
CPCs are hard to influence and are oftentimes actually higher for these easy apply postings. In the third quarter, they rose to a high level of $0.71 (three-month average).
Easy apply rates have historically been on the rise, but that momentum seems to have stopped. The median apply rate has been hovering around 24.3% over the past three months.
Much like the plateau seen in easy apply rates, cost-per-application (CPA) has also remained flat over the past three months. The median CPA stabilized at $2.82, indicating that the reduced demand observed earlier this year may be leveling off. This suggests that while the market has softened, the downward trend in recruitment costs could be nearing its end.
Recruitment Marketing Forecast
Utilizing Appcast’s weekly historical CPA data, Recruitonomics has developed a six-month forecast for cost-per-application (CPA) in the manufacturing sector. Our analysis, informed by past CPA trends, suggests a marginal increase into the rest of the year, then a subsequent decline in the first quarter.
What does this mean for recruiting in Manufacturing?
Although 2024 isn’t over yet, the results for manufacturing have been underwhelming. In the first half of the year, the industry added only 12,000 jobs, as higher interest rates delayed capital investment and hiring decisions. However, with the Federal Reserve now reducing rates, the pressure should ease, potentially reigniting employer demand. As we head into 2025, recruiters should anticipate a more competitive hiring environment, though not as intense as during the pandemic, with opportunities likely to increase as economic conditions improve.
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.
