Are We in a Hiring Bubble?

Last week, upbeat headlines screamed from the front pages of business publications: “Hiring Blew Past Expectations!” “A Strong Finish to the Year!” “Payrolls Grew Much More Than Expected!” 

And for good reason: According to new numbers, the US economy added 256,000 jobs in December 2024, surpassing expectations and marking the largest increase since the previous March. This came after November had posted 212,000 jobs, making for an impressive two-month total at year-end. “The US economy continues to be a shining star on the world stage, despite what you might read in political commentary and consumer sentiment,” says Torrey Foster, vice chairman of the Consumer Markets and CEO and Board Services practices at Korn Ferry. He notes that today’s pessimistic outlook tends to be rooted in inflation and costs, not employment.

Still, try convincing the many highly skilled job seekers who are currently enduring the so-called “white-collar recession.” Firms may be adding jobs, but they’re also holding back in certain areas—for instance, where they think AI may take over, or where they believe salaries grew too high during the early post-pandemic era.

For her part, Shanda Mints, vice president for RPO analytics and implementation, says that the high December hiring numbers are especially surprising for the end of the year. “November and December are traditionally slow months for us,” she says. She expects several strong months ahead, as large organizations continue their current hiring spree; this may be followed by some scaling back in the face of upcoming economic conditions, such as tariffs. “I think we’re going to see a bubble, and then some rightsizing.”

The December jobs report from the US Bureau of Labor Statistics suggests that the majority of fields showed zero or minimal jobs growth in December, among them finance, professional services, construction, manufacturing, wholesale trade, transportation and warehousing, and mining. Retail added 43,000 jobs—but only after losing 29,000 in November. On the whole, consumer markets in particular are struggling. “Household budgets are squeezed,” says Foster. “Consumers are unhappy and feeling stressed.”

Meanwhile, a substantial percentage of December corporate-jobs growth came from healthcare, which added 46,000 jobs in December. Experts expect the health hiring boom to continue. “It’s a steady trend, and we’re in the middle of it,” says Liz Schaefer, practice leader of the Human Resources practice at Korn Ferry. “This will continue to be a high-demand area,” she notes, driven by an aging population and those with chronic conditions that require ongoing care—so much so that HR leaders are wondering how they’ll fill the projected need.

As for whether consumer-product companies will continue to struggle, much depends on inflation, interest rates, and housing, says Foster. “If consumers can’t afford to rent an apartment or buy groceries, then their sentiments are not great,” he says. He’s expecting a challenging couple of quarters in his neck of the woods—but not necessarily elsewhere in the economy.  

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