Friday was the September jobs report, which indicates a strong U.S. labor market, with employers adding 254,000 jobs in September and a drop in the unemployment rate to 4.1%. This data alleviates recession fears and suggests the job market remains resilient. However, the robust job growth may delay aggressive rate cuts from the Federal Reserve, as wage gains also exceeded expectations, raising concerns about inflation. The next jobs report, due November 1, could be influenced by external factors like the Boeing strike and Hurricane Helene.
Looking at the SMB data in the September jobs report indicates a decline in small business job openings, with 34% of owners unable to fill positions, the lowest since January 2021. Hiring attempts decreased to 59%, with 52% reporting few or no qualified applicants. Job openings fell notably in construction, while a net 15% plan to create new jobs soon. Despite challenges in finding qualified workers, 32% reported raising compensation, although this is the lowest since April 2021. Labor quality concerns decreased to 17%, while labor costs remained stable.
Looking at the data from an IT employment perspective, the market showed signs of recovery in September 2024, with the unemployment rate falling to 2.5% and the addition of 118,000 new tech positions. Companies are increasingly focused on hiring talent for AI-related roles, driven by the need to innovate and deploy AI at scale. Job postings for tech positions rose to over 516,000, with a notable increase in roles not requiring a four-year degree.
The current labor market is characterized by a slowdown in hiring and low layoffs, creating a “no-hire, no-fire” environment where job seekers face stiff competition and are less likely to quit. The hiring rate has fallen to its lowest since 2013, while layoffs remain at a historic low.
The sixth annual International Innovation Barometer by Ayming reveals that 86% of global businesses now allocate specific budgets for AI R&D, with 84% believing AI positively impacts innovation. A significant 41% have restructured R&D teams for AI integration, highlighting a shift in innovation priorities. AI is increasingly viewed as a catalyst for collaboration and creativity, with 53% using it for data analysis and 39% for idea generation.
Integris’ report on US banks’ IT spending in 2025 reveals a significant increase in IT budget awareness among bank executives, with 27% able to estimate their budgets, up from 6% in 2023. Despite economic concerns, many banks plan to raise IT budgets by at least 10%. Key priorities include cybersecurity, data analytics, and digital transformation. While satisfaction with IT services has improved, 74% of banks still see room for enhancement, highlighting the need for continued investment in IT to boost operational efficiency and customer experience.
Constant Contact’s Small Business Now report reveals that 89% of small businesses globally are affected by inflation ahead of the 2024 holiday season, with 52% of consumers reducing spending at these businesses. Many SMBs are adjusting marketing strategies, with 46% cutting expenses and 39% raising prices. The report highlights the importance of early holiday planning, as 42% of SMBs wait until October or later to prepare. Key strategies for success include improving efficiency, offering promotions, and utilizing social media and email marketing.
Why do we care?
Small businesses are struggling to fill positions, with hiring attempts decreasing and a marked decline in job openings. This suggests two key things for IT service providers:
SMBs are having trouble finding workers, which likely increases their reliance on technology to maintain operations. Solutions like automation, AI-driven tools, and managed services can help fill these labor gaps, making IT service providers more crucial to their operations.
While the broader economy shows strength, SMBs might tighten their budgets, focusing on essential expenditures. IT providers need to align offerings around cost-saving technology or ROI-driven solutions to appeal to these cautious business owners. They could position themselves as problem-solvers, offering tools that increase efficiency with fewer employees.
