Global labor market remains sluggish amidst policy recalibration

By Kory Kantenga , Head of Economics, Americas, at LinkedIn

The US Federal Reserve’s first interest rate cut in over four years made international headlines this month as it symbolically captures a global pivot from monetary tightening to contain inflation to monetary easing to support growth and the labor market. This pivot comes as central banks look to bolster their labor markets as we see unemployment creeping up (US , UK , Canada , Eurozone ) as well as recalibrate monetary policy after one of the most rapid tightening cycles in recent decades. However, recent interest rate cuts and other forms of monetary easing will take time to filter into the labor market on a meaningful scale, which begs the question: are global labor markets healthy enough to withstand the gradual lowering of interest rates?

In this edition of the State of the Labor Market, we explore the health of the labor market through the lens of hiring and job seeker competition against the backdrop of a mixed and shifting macroeconomic environment. Despite the promise of more growth next year, we continue to see the labor market slow outside of emerging economies. As uncertainty persists, within more advanced economies, competition between job seekers has increased notably across both countries and industries globally. In this more challenging environment, it may be critical for job seekers to know where hiring remains more upbeat, so we round out this edition looking at global hiring across job functions.

Economic headwinds continue to weigh on growth and the labor market

The US Federal Reserve’s larger than expected interest rate cut rounds out a global pivot in monetary policy. This pivot moves monetary policy action from increasingly restrictive, demand dampening, and disinflationary to less restrictive and increasingly demand supporting. Central banks in other major economies undertook this pivot earlier this year, including the Bank of Canada (June) , the European Central Bank (June) , and the Bank of England (August) . By lowering interest rates, these central banks aim to reduce the cost of borrowing, encourage spending, and ultimately support growth and the labor market. While promising to see moves in this direction, interest rates remain high relative to inflation, which encourages saving relative to spending and borrowing, dampening growth prospects. Thus, it is unlikely that recent rate cuts will lead to a near-term re-acceleration in the global labor market.

To assess the health of the labor market, we must consider economic growth which is necessary for a healthy labor market. With the exception of the US and Brazil, growth expectations this year remain well below past growth rates (2015-2019). In the Eurozone, growth expectations remain tepid this year with growth expected to be less than half of the average growth rate from 2015 to 2019 in Germany, the Netherlands, and the United Kingdom. However, we expect growth in 2025 to improve in France, Germany, the Netherlands, and the United Kingdom expected to improve noticeably next year. In the Americas, the US and Brazil are poised to slow in 2025 after a solid year of growth, while Canada is expected to move significantly closer to its pre-pandemic growth average. Outside the Americas and Eurozone, Australia looks set to improve and India remains poised to continue on its solid growth trajectory in 2025.

While economic activity continues to expand at a slower pace this year, the labor market continues to slow with the LinkedIn Hiring Rate showing ongoing－albeit more moderate－declines for some of the world’s largest and most advanced economies. According to the LinkedIn Hiring Rate, the pace of hiring has slowed comparably in Australia, Canada, France, the United Kingdom, and the United States. The pace of hiring has also slowed in the Netherlands and Germany but remains well below its August 2018 pace in the Netherlands while on par with its August 2018 pace in Germany. In contrast, emerging economies India and the United Arab Emirates have seen a recent acceleration in hiring and continue to see hiring well above its pre-pandemic pace. Brazil also continues to see hiring well above its pre-pandemic pace, however hiring has slowed this summer.

As the pace of hiring continues to slow, we have seen fewer members changing jobs on LinkedIn as the world of work continues to undergo immense changes around where and how people work. The share of job transitions among members has declined across the globe year-over-year since late 2022 with a median decline of 13%. Both France and Germany have seen some of the largest declines (-17% in Aug 2024 vs. Aug 2023) over the past year, while Australia (-15%), Brazil (-11%), Canada (-13%), the Netherlands (-13%), and the United Kingdom (-13%) have all seen comparable declines in job transitions. The US has seen a more moderate decline (-8%) comparatively, while the United Arab Emirates (-2%) and India (-1%) have experienced the smallest declines over the past year. The UAE and India look poised to actually see an increase at some point this year in the number of members making job transitions compared to the same time last year. Thus, we continue to see some upside in emerging economies while the Eurozone labor market slows and the Americas slow more moderately.

Job seeker leverage reverses across the globe and key industries see applicants surge

As the labor market has slowed, we have seen job seeking activity rise across the globe . This rise in job seeking activity has coincided with a decline in job postings, leading to increased competition between job seekers. Looking at the number of active applicants per paid job posting on LinkedIn (a variant of our labor market tightness measure), we see an increase in the average number of active applicants for a job on LinkedIn across major markets with the exception of France. Only in France has this number remained virtually unchanged in the countries comparing August 2022 to August 2024. In Canada and the United Kingdom, the number of active applicants per job has doubled from two and a half to five. In Germany, the number of active applicants per job has more than doubled. In Australia, Ireland, the Netherlands, and the United States, we have seen more modest increases.

Examining major industries globally, we also observe increases in the number of active applicants per job across the board. However, we do see notable differences in the size of the increase. Construction and Retail have seen some of the smaller increase with the average number of active applicants per job increasing from four to four and a half, comparing August 2022 to August 2024. We also see more modest increases in the number of active applicants per job in Hospitals and Health Care and Manufacturing, increasing from five to six.?

In Accommodation and Food Services, Financial Services, and Technology, Information, and Media, we see larger increases from five to seven active applicants per job. The largest increase occurred in Professional Services where the number of active applicants per job more than doubled from three to seven. Professional Services (which includes accounting, consulting, legal, and marketing services) remains one of the hardest hit industries by restrictive monetary policy, thus it comes as no surprise that competition between job seekers in this industry has increased significantly for the last two years. Overall, these industries especially have seen a lot of change in recent years from the reversal of macroeconomic tailwinds to headwinds, emerging technology, and a paradigm shift in how and where people work.

Consulting sees sizable slowdown while healthcare hiring remains robust

While global growth looks set to improve in 2025, it remains tempered by slower growth in the US. With only a modest acceleration in growth and increased competition for jobs, the job market looks set to remain challenging for job seekers in the near future. Thus, knowing which areas look promising and which do not may be critical to a successful job search in the coming months. To assess which areas have shown promise, we look at the Global LinkedIn Hiring Rate for each job function. A job function constitutes a broad area of work oriented towards a particular set of tasks (e.g., accounting).

We see that the pace of hiring in consulting has slowed more than other job functions. In fact, the change in the Global LinkedIn Hiring Rate for Consulting from August 2024 to August 2018 is the most negative (-28%) among all job functions considered. In contrast, the pace of global hiring has increased the most (35%) in healthcare services. Hiring in job functions related to professional services like legal services, operations, and research remains near August 2018 levels. However, hiring for other prominent professional service roles like accounting (-21%) and marketing (-20%) has slowed significantly comparing August 2024 to August 2018.

Across the globe, we continue to see signs of slowdown in the labor market whether we look at hiring or applicants per job across countries, industries, and job functions. While growth prospects point to better days for the labor market next year, it remains to be seen whether recent monetary policy recalibration has come soon enough to thwart further slowdown in the near future.

For more insights, check out our latest US Workforce Report and learn more about the LinkedIn Hiring Rate here .