Market Update: Implications of Inflation Trends and Rising Gig Economy Demand

In the past week, the Consumer Price Index (CPI) indicated that inflation pressures remain persistent, challenging the earlier market anticipation of potential rate cuts. The CPI climbed 3.5% year over year compared to February’s 3.2% increase, moving farther away from the Federal Reserve’s 2% target rate.

According to Jerome Powell, “More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress this year on returning to our 2% inflation goal”. As markets have adjusted to recent data and Powell’s speech on the 16th, markets are now pricing virtually 0% odds of a cut in May.

Key Takeaways for Employers:

  • Adopt Flexible Hiring Practices:
    With the market dynamic currently resembling some aspects of the 70’s stagflation, employers should prioritize flexibility in their hiring strategies. This includes being receptive to contracting positions, which allow for swift adaptation to economic shifts by scaling workforce requirements up or down as needed.
  • Leverage Gig Economy Growth:
    The substantial rise in gig demand presents an opportunity to integrate more freelance and contract roles into traditional employment models. This approach accommodates fluctuations in business demands and taps into a broader talent pool accustomed to flexible work arrangements.
  • Monitor Economic Indicators Closely
    Given the volatile economic environment, continuously monitoring inflation trends and labor market conditions will be crucial. This vigilance will help make informed decisions that align with immediate needs and long-term strategic goals.
  • Prepare for Continued Economic Uncertainty
    The possibility of enduring stagflation-line conditions suggests that businesses should prepare for scenarios that involve prolonged economic turbulence. Strategic planning should include robust scenario planning exercises that account for various economic outcomes.

Alex Fourlis, General Manager of Veritone Hire, commented on these findings: “Employers and talent acquisition professionals should think about adding flexibility to their recruitment strategies and budgets. These last findings indicate a prolonged period of uncertainty and volatility for labor markets; flexible programmatic advertising strategies are a great way for employers and their recruitment teams to maintain optionality and scale their recruitment efforts up and down at speed as demanded. Veritone Hire’s job advertising platform allows recruiters to pivot between hiring efficiently for a single role to managing large recruitment drives at scale within a couple of clicks.” 

As we navigate through an economic landscape marked by high inflation and significant shifts in labor demand, drawing parallels with historical periods like the 1970s could inform more resilient and adaptive business strategies. Employers are advised to embrace flexibility and prepare for various economic contingencies to manage this complex period effectively. 
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Further Reading: 

Job Application Tracking in a Cookie-less World

Wolfpacks and Minesweepers: The Real-World Inspiration for Veritone Hire’s AI Algorithms