The 2024 election results have laid bare a stark reality: Americans aren’t buying the rosy economic picture painted by recent job market numbers. Despite headlines touting low unemployment and thousands of new jobs, voters rejected the optimism and made it clear that they feel the economy doesn’t feel nearly as healthy as the numbers suggest. While official data shows growth in sectors like healthcare and local government, the daily experience of rising costs and economic uncertainty tells a different story.
Beneath the surface of these encouraging statistics lies a more complex and challenging reality for both consumers and businesses. Long-term employment—longer than 27 weeks—looms for over a million Americans. Natural disasters like Hurricane Helene and recent strikes at mega employers like Boeing stir uncertainty. Not to mention companies hesitating to hire as they anticipate the effects of rate cuts and an evolving economy.
Looking deeply into the job market numbers today, it’s pertinent to air caution at the boldly positive trends and read between the lines (of data).
Finding facts in the numbers
Despite conflicting reports, the underlying data tells a more complex story. The true health of the economy seems to be masked by the surface-level statistics. Recent PCE data indicates that core inflation remains stubbornly high, suggesting that there are still underlying issues that may not be apparent from the headline employment numbers.
Adding to these concerns, October brought significant downward revisions to previous employment reports. August and September job market numbers lowered by a combined 112,000 positions. August’s revision was particularly telling. The downward adjustment of 81,000 jobs was actually larger than the final reported gain of 78,000 jobs for that month. These substantial revisions often signal underlying labor market weakness not captured in initial reports.
Consumers, faced with continuing inflation and rising costs of living, are being stretched thin. This can be seen via decreased sales in industries such as auto repair—car owners pinching pennies by making simple fixes themselves—and decreased loan performance in American borrowers. When the bare minimum, like food and gas, are breaking the bank, buyers tend to cut costs where they can, but it’s not a sustainable fix.
Household debt is also rising, with mortgage debts at the top of the list at a $77 billion increase. Not only are Americans trying to save where they can, but they’re also trying to pay off debts and stay afloat. Many indicators, such as small business retail sales appearing up 2.1% year over year, try to tell a different story, but this lags as a hint to how the economy is really doing compared to the average consumer. The average American will continue to spend, often with credit, until they can’t anymore, and this already seems to be happening given rising debts and increasing delinquency rates in both the credit and mortgage sectors.
Add in the fact that most companies, especially in tech, aren’t hiring right now, and you don’t have a great outlook. Whether it’s fear of what the election will do to the economy, trimming staff to avoid mass layoffs in the event of a recession, or just remaining stagnant, companies just aren’t hiring like they were two years ago. In fact, over half of the jobs cut in August were in the tech sector, at nearly 40,000, as companies hone in on revenue and start to incorporate new technologies.
Work in the era of AI
Perhaps the most impactful of this new technology is artificial intelligence (AI). AI is already reshaping roles across sectors, automating routine tasks in banking, logistics, and even some healthcare roles. While certain jobs–especially those requiring social skills and creativity–will always need the human touch, AI’s rapid adoption is reshaping expectations around future labor demand.
In fact, 73% of companies are already using AI in some way, shape, or form, and big players are predicting it could be a game changer for data, redefinition of workflow, and how employees interact with their work and one another.
While automation may not immediately result in layoffs, it will reshape how jobs are performed, particularly in sectors such as construction, healthcare, and business. And until we know more about what work looks like in the era of AI, the transition period might have growing pains as we navigate new technology amidst everything else.
Just like computers replaced typewriters, and typewriters replaced handwriting before that, more jobs and more productivity will likely emerge with the advancement of AI technologies. This will take time and adaptation for consumers and companies alike—with work as we know it changing day by day, the hiring and hirees are both forced to adapt.
Bracing for challenge
This isn’t all to say we’re doomed and there’s no hope for the labor market—rather, caution in the face of good news regarding the employment market is recommended. Recent proposals from influential figures add another layer of uncertainty to the employment outlook. Elon Musk’s proposed $2 trillion government spending cut plan, which he admits would cause ‘some temporary hardship,’ could significantly impact the labor market. While proponents argue these cuts would target inefficiencies, such dramatic spending reductions would likely affect employment across multiple sectors, particularly in government-adjacent industries. 2025 will be an important year for job market numbers to grow at this pivotal point, and it’s up to key players like the Fed to nail the landing to avoid a full-blown recession.
The impact on the economy is real, and while examining reports at face value shows good news, the reality is we may be heading towards a more challenging time for employment. In an era of rapid change, the numbers tell a deeper story–one that demands vigilance, adaptability, and a willingness to look beyond the headlines.