The USA Economy and the Job Market - a balanced view
The USA economy has been in the news around the globe recently
The USA economy has been in the news around the globe recently so I wanted to align the headlines with what is actually going on in the job market across data, technology and analytics.
Depending on what you read and who you follow, you could be forgiven for feeling a little confused about how buoyant the data and technology job market actually is. With high profile companies laying off people on the one hand and news stories around the growing need for technology professionals on the other. Looking at the available data however provides a calmer picture, and of course individual stories will prevail, so I don’t want to take away from the struggles that some people are clearly having, more a desire to balance out the story.
The latest quarterly reports by the tech giants showed promising results with AI bolstering growth even higher than Wall Street predictions. Google (Alphabet) for example won across areas like Cloud, Search and Ad revenue. With heavy investment in AI, resulting in AI Overviews – previously known as Search Generative Experience – this has ensured they have done better than expected in the 2nd Quarter of the year. Similarly, Microsoft reported a 9% increase in revenue from the same period last year, although Azure hit 29% growth it missed the 31% predicted growth by analysts.
Meta equally reported strong quarterly results, garnered mainly from their advertising revenues. Investors were wooed by AI chat, with Zuckerberg promising the world around changes to advertiser interfaces.
Amazon Web Services rose by 19% (from same period last year). Prime video streaming has also increased this year, sending a competitive arrow in the directions of Netflix and Disney Plus and advertising revenues increased by 20%. The one area it didn’t perform as well in was on the shopping platform itself – although it did increase revenues YOY, it didn’t meet expectations, with the likes of TEMU and SHEIN adding competition and providing cheaper alternatives for cash strapped shoppers.
Apple similarly unveiled its Apple Intelligence, likely to become the company’s next big revenue generator, not only driving device sales but also income via Apple play.
On the flip side to this, tech start up investment grew by 11% QoQ and 23% YoY, which begs the question, why is the job market perceived to be so slow to catch up?
One explanation is how the media chooses to report on the topic. As humans we are hard wired for bad news, so naturally the media will focus on distressing and depressing news items to ensure readership. Another is that many companies have got used to running a lean team and doing rather well out of it (financially speaking). Individual burnout reports are on the rise and this would seemingly back up the previous statement, there will come a point however, if it hasn’t already, where companies cannot continue to innovate and deliver at a competitive rate unless some slack is provided for exhausted teams in the form of increased headcount. Yes, the industry was perhaps guilty of over hiring and inflating headcount beyond what was sustainable, and the scales have tipped, but now I believe we are in for a period of balance, with sustainable hiring and retention on the horizon. The current workforce demands it.
Added to the mix is the way people are choosing to work. More than most countries, the USA is embracing borderless hiring, which is great for professionals around the world, but it can be impacting the rate at which USA based professionals are being picked up by companies.
As a business we speak with clients and candidates from all types of businesses requiring data and tech teams. I have found that candidates can sometimes dismiss start-ups, especially with the lure of a big logo sitting on their CV. However, these types of companies offer fantastic alternatives, from greenfield project work through to share options and team dynamics. Companies can often compete on this advantage, providing training, personal development, opportunities for growth and innovation, agility and quick promotion through the growth phase.
Looking at the last 2 quarters of 2024, the job market really does look promising. Hiring intent surveys across the globe show that overall US companies have the strongest percentage of employers with hiring intent (34%) and 51% of those are within technology. The market now is comparable to pre-covid years, as the years between 2020 and 2022 were in many ways unsustainable. This slowdown is creating a different candidate experience which I explore in part 2.....
