Metros under the microscope as the Americas see momentum and the Eurozone continues to slow

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

According to the UN , over half of the world’s population lives in urban areas, and this number looks poised to increase to nearly 70% over the next quarter century. So when it comes to labor market momentum and health, the performance of metropolitan areas plays a pivotal role and even more so in the future.

In this edition of the State of the Labor Market, we look at hiring momentum across 50 of the largest metropolitan areas across the globe. First, we revisit country-level hiring trends to examine where hiring appears to be stabilizing and where it continues to slow. We also check in on worker departures, which are typically fueled by workers quitting during non-recessionary periods. Using both the LinkedIn Hiring Rate and the LinkedIn Separation Rate, we map out year-to-date country-level labor market dynamics.?

Overall, the labor market in most countries we examine looks to have stabilized or seen substantial moderation in the slowdown, however the situation in major Eurozone economies continues to deteriorate despite last month’s interest rate cut . Thus, it comes as no surprise that Eurozone metro areas have seen the largest downswing in hiring momentum across the metro areas we examine while the Americas dominate the list of metros on the upswing.

Hiring trends diverge across countries

One of the most prominent features of the global economy in 2024 has been divergence. We have seen regions and countries diverge in growth patterns and prospects as well as economic policy this year. The Bank of Canada and European Central Bank (EBC) implemented their first rate cuts in several years while the US Federal Reserve, Bank of England and Reserve Bank of Australia all continued to hold interest rates steady. These decisions come after Latin American central banks implemented rates earlier this year – multiple cuts in some cases (e.g., Brazil). As the global economy has slowed, economic fortunes have fractured. We see the same dynamic occurring in labor markets across the world when it comes to hiring prospects.

According to the LinkedIn Hiring Rate, the pace of hiring has yet to meaningfully reaccelerate across the major economies we track. With the exception of Brazil, the pace of hiring now sits below its value at the pandemic onset (March 2020) across the globe. As of June, this slowdown ranges from slight (-3% and -4% vs. March 2020 in Mexico and Germany) to sizable (-10% to -20% vs. March 2020, e.g., US, UK and Canada).?

While reacceleration remains elusive, hiring continues to slow in some places and level out in others. In France, Germany, and Singapore, we continue to see hiring slow, though we have seen the pace of hiring level out in Germany and Singapore in recent months. Elsewhere, hiring looks to be reaching a steady pace with smaller hiring declines each month and hiring pick ups in some cases (e.g., Mexico). In Brazil, the pace of hiring looks to have leveled out as early as last Fall.

Separations slow as hiring opportunities wane?

Though hiring remains a key performance indicator for the labor market, separations also play an important role in a dynamic labor market. Workers leaving jobs can create an opening for other workers to fill that role or enable employers to reallocate headcount to different roles, creating new opportunities. Of course, some job separations – like layoffs aimed at headcount reduction – are primarily job destruction. However, those separations typically remain outnumbered by retirements and voluntary quits in advanced economies. Outside of recessions, voluntary quits tend to drive changes in the separation rate. We measure the rate at which workers depart their positions with the LinkedIn Separation Rate . The LinkedIn Separation Rate is based on members ending positions on their profiles and better reflects voluntary quits than layoffs or termination as we typically see members update when leaving their position for a new one. Across the countries we track, we see that the pace of workers leaving their jobs peaked during Summer 2022 after hiring peaked in Spring 2022. So as hiring waned, separations slowed.

According to the LinkedIn Separation Rate, the pace of worker departures remained elevated relative to the onset of the pandemic from around Spring 2021 to Spring 2023 (“The Great Reshuffle”), peaking at over +10% compared to March 2020. The earliest slowdown in departures occurred in the US in late 2022, which subsequently had its pace of departures stabilize in late 2023 and has held steady since then.?

Outside the US, we saw the pace of departures level out in several countries as 2023 progressed, including Australia, Brazil, Canada, Mexico, Singapore, and the UK. Across each of these countries and the US, the pace of separations now sit 10% to 15% below their value at the onset of the pandemic (March 2020). In Brazil, the pace of departures remains elevated as of June (+6% vs. March 2020) relative to onset of the pandemic. In France and Germany, departures continue to slow. While the pace of departures in Germany has normalized (and possibly leveled out) to its March 2020 pace, it continues to decline in France, sitting around 10% below its March 2020 value as of June.

All in, we see signs from both hiring and separations of labor market stabilization across the global labor market outside the Eurozone. This stabilization looks especially prominent in the Americas where the US looks to have begun stabilizing earlier, and labor market dynamics in Brazil remained elevated relative to the months leading into the pandemic (Jan 2020 to March 2020). That said, a stable labor market is not necessarily a more robust one. In most countries examined, the pace of worker arrivals and departures remain notably slower than the months leading into the pandemic, indicating that global labor markets are producing fewer opportunities to start a new job or leave an old one.

The slowdown continues to go in the wrong direction for workers in the Eurozone where the pace of hiring and separations continues to slow in France and Germany. Recent months’ data suggest that Germany may be in the early stages of stabilizing which would be a strong development as Germany still remains near its Jan 2020 to March 2020 pace for both hiring and separations. With more promising economic data this year and a rate cut working its way through the economy, the outlook for the Eurozone is probably brighter than the recent labor market data suggests.

Hiring momentum in metropolitan areas

With most workers living in metro areas and increasingly so, the question arises of which areas stand to attract talent. The promise of an improving labor market will likely be a key attraction, hence we look at which metros appear to be on the upswing (and downswing) today. To identify metro areas on the upswing and downswing, we look at the LinkedIn Hiring Rate of 50 metros across Australia, Brazil, Canada, France, Germany, Ireland, Italy, Mexico, Spain, the United Kingdom, and the United States. Metro areas on the upswing are ones where the trending (six-month trailing average) LinkedIn Hiring Rate has seen improvement from January to June either by increasing or seeing the smallest declines. Metro areas on the downswing are ones where the trending LinkedIn Hiring Rate has seen deterioration from January to June either by seeing the largest declines or smallest increases.

Only five metro areas show a positive upswing (Dublin, S?o Paulo, Atlanta, San Francisco Bay Area, and Belo Horizonte) while the remaining top ten metros on the upswing show the most moderation in their slowdown in hiring. With the exception of Dublin, all metros on the upswing are in the Americas with all the major metros in Brazil considered in the top six. Sunbelt metro areas (Atlanta, Austin, Phoenix) and recovering tech hubs (San Francisco Bay Area, Austin) populate the upswing list for the US.

Among the metros where hiring slowed from January to June, all ten are in the largest Eurozone economies with Lyon and Marseille having seen the worst downswings among the 50 metros considered, followed by Hamburg and Berlin. Despite Dublin showing the strongest upswing in June, the metro areas in France, Germany, and Italy all saw hiring momentum slow. Even with this development, unemployment in the Eurozone remains exceptionally low . Hence, the ongoing loss of labor market momentum in Europe’s largest economies is unlikely to shift the ECB to cut rates more aggressively for now.

Worker sentiment remains weak but rebounding

As hiring and separations peaked in the first half of 2022, so too did worker confidence. However, even as hiring declines slowed in the latter half of 2023, worker confidence fell. In the US, worker confidence now sits near pandemic lows, according to LinkedIn’s Workforce Confidence Index. We have also seen sizable declines in worker confidence in Australia, Canada, and the UK, though worker confidence in these countries remains well above pandemic lows. Since May, worker confidence has rebounded in all of these countries, including the US, which may be an early sign of confidence stabilizing. However, it remains the case that workers feel much worse about the labor market today than they did this time last year as hiring remains slow with no immediate prospects of reaccelerating.

For more insights, check out our latest US Workforce report and learn more about the LinkedIn Hiring Rate here . LinkedIn’s Workforce Confidence Index tracks workforce confidence along three dimensions: career progress, improving finances, and job opportunities/security. Many thanks to Allie Lewis for Workforce Confidence Index insights and data!