In a slowing labor market, small employers are keeping the number of job openings afloat.
The overall number of job openings has been slowly declining since 2021, following a post-pandemic surge. As shown in the chart below, while the number of Americans employed will continue to grow in 2024, the projected growth has slowed since the significant increases of 2022 and 2023.
Small businesses, though, break the trend. Businesses with fewer than 50 employees had 50% more openings in April than in 2019, a stark difference from large employers’ 14% fewer openings. These openings are fueling the current labor market, as small businesses’ impact is not to be underestimated: they account for half of all job openings in a month and employ 45.9% of the US workforce.
The resilience of small businesses’ job openings implies that consumer demand is high enough to justify taking on the higher borrowing costs created by the Fed’s rates. This anomaly means that the Fed’s rates are not yet having their desired effect of quelling demand to lower inflation – and justifies the Fed’s decision to delay cutting rates.
Throughout the next decade, the home health and personal care industry will continue to fuel small business job growth. Because of the US’ aging population, home health jobs will increase by 22%.
Source: David Harrison, WSJ; Kelly Main, Forbes.
Victoria Freeman is a Collegiate Associate at the Manhattan Institute
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