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
The accommodation and food services sector added 76,000 net new jobs in September, a strong rebound from a very slow spring and beginning of summer. The sector grew healthily in the third quarter this year, returning to the trend of steady growth seen last year. The sector is just 10,000 jobs from its pre-COVID-19, February 2020 level, one of the only sectors that has yet to recover all the lost jobs from the pandemic. In some ways, that is because of the strong labor market—many workers who may have worked in the accommodation and food services sector were able to find better-paying jobs with benefits in other high-demand sectors. Now that the overall labor market has softened, perhaps those workers will return to these food service jobs.
The food services subsector is driving the majority of the growth in the overall sector, adding 69,400 jobs in September. The accommodation sector is a far smaller subsector that does not grow at the same level, and it showed in September when it added just 6,600 net new jobs.
As you can see, employment growth has really fallen and stabilized around 1% for both subsectors, down from incredible highs in 2022. There was a slight increase in the food services employment growth last month, now at 1.7%.
Wage Trends
Wage growth has also flattened across subsectors within leisure and hospitality, the overarching sector that includes food services and accommodations and more hospitality subsectors. Food services and drinking places workers are seeing steady wage growth around 4%. In pure hospitality subsectors like amusement and hotels, wage growth is weaker, up 2.1% and 1.1% from the year before, respectively. Performing arts and spectator sports wages have risen over the past year but decreased slightly in the third quarter to 3.2%.
Openings and Turnover Trends
Openings in food services and accommodations have increased slightly over the last three months, now at 5.9%—higher than the labor market average. At the beginning of the year, hiring rates matched and even surpassed openings rates, but they have tapered off slightly in the third quarter, now at 4.9%. Quits remain far above layoffs but are trending down, now at 3.5% compared to 0.8% for layoffs.
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.
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
For the most part, trends in recruitment metrics match the more subdued labor market in the sector. Cost-per-clicks are an exception; it is becoming harder to attract eyes to job ads, especially in the food services subsector. CPCs have increased to $1.00 over the last quarter. For travel and tourism, CPCs have been far more stagnant around $0.80, with a slight increase in the third quarter.
The real story is within apply rates and cost-per-applications. Apply rates have skyrocketed in both travel and tourism and food services in recent months; the shift in demand in the sector has created a new situation for job seekers, one where they need to apply more widely with fewer options. The key metric now stands at 8.3% over three months for food services and at 7.2% over three months for travel and tourism. These high apply rates have had a positive impact on CPAs, which have fallen to just $9.16 over three months in food services. For travel and tourism, CPAs have trended down but have not fallen so dramatically. They are now at $14.13 over three months.
Easy Apply
Easy apply CPCs have trended upwards slightly in recent months for the travel and tourism subsector, now at $0.87 over three months. In the food services sector, they have remained steadier, nearly flat at $0.90 over three months.
These two sectors are particularly well-suited for this application method, as the applications do not require too much additional information beyond a resume, compared to other sectors like healthcare or professional services. As a result, both subsectors enjoy high apply rates in the easy apply method, though travel and tourism saw an unexpected decrease in September. Food service apply rates remain high and plateaued slightly at a high level of 27.5% over three months. Travel and tourism apply rates plummeted to 10% in September, but the three-month moving averages remains around 15%—the large decrease is likely just monthly volatility.
CPAs echo the apply rate trends in both subsectors. In food service, they are unbelievably low and flat around $3.05 over three months. Travel and tourism recruiters are facing more volatility, with apply rates shooting up in September to match the decrease in apply rates.
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 food service and hospitality sectors. In the food services sector, CPAs are projected to trend downward ever so slightly over the next two quarters, remaining below $10.00. Travel and tourism CPAs will steady itself around $15.00, with a slight increase projected around the holiday season.
What Does This Mean for Accommodation and Food Services?
The accommodation and food services sector has certainly slowed, as shown by employment growth rates throughout the year. However, the sector has not begun to shed jobs yet—difficulties with recovering jobs from COVID-19 and the continued consumer demand for these activities have managed to keep the sector afloat, even as the greater labor market falters. Whether the sector will be able to sustain growth as it moves to the slower winter season remains to be seen. The falling demand has proven helpful for recruiters, who face less competition and therefore lower recruiting costs.
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.
