In 2023, the U.S. economy didn’t follow expectations, avoiding a recession and making notable progress in slowing down but in a more controlled and gentle way.
The tough part of tackling inflation seems to be behind us. Last year, there were legitimate worries about the tricky task of fixing an overheated job market and dealing with high inflation without causing too much pain in the economy. Fortunately, it seems like we’ve mostly sorted out these issues. What’s even more surprising is that the GDP growth turned out to be much stronger than we expected.
The labor market is expected to remain healthy heading into 2024. Wage growth now appears under control and, according to Goldman Sachs, “We do not attach much significance to the recent modest rise in the unemployment rate and expect it to continue hovering in the mid-to-high 3s next year because the layoff rate remains low and job openings remain even higher than in 2019—one of the best labor markets in US history—in nearly every industry.”
According to the vibe on Wall Street, it looks like the time of increasing interest rates is over. Most economists predict that in 2024, interest rates will either stay steady or go down, with the latter being more likely. They’re estimating the GDP growth to be between 1% and 2%, but we’re crossing our fingers that the strong U.S. economy will pull off another 2023 and exceed expectations.
Inflation- Under Control
Labor Market- Healthy
Wage Growth- Normalizing
Interest Rates- Steady or Decreasing
GDP- Slow & Steady Growth
What We’re Seeing?
2023 has been a very unique year. We’ve seen plenty of hiring but primarily replacement hires for existing roles. As has been the case in most tight economies, companies, hiring managers and candidates have all been more conservative in relation to hiring and career changes. The biggest pull-back we’ve seen has been in late-stage startups (Series C+) conserving cash and niches that overheated in ‘21/’22 (e.g. Genetics).
The great news heading into 2024 is seeing and hearing of a lot of hiring plans with our larger clients ($1B+ Revenue). These are the same companies that were the first to pull back when rates began to rise. Hopefully their immediate hiring plans are a harbinger of future hiring down market. We’re also seeing a lot of activity with smaller, mature companies as they’ve weathered the storm and are getting back to business as usual.
2023 proved to be a very challenging year for many companies but we’re now seeing and hearing a lot of positive momentum heading into 2024.