Our data show that the rate of new hires as a percentage of the existing workforce has been declining in recent months. The latest reading stood at 2.5% in September 2023, down slightly from 2.6% in August and 2.7% in July.¹

“We’ve been watching the new hires rate drop pretty steadily over the course of 2022 and 2023, which suggests a softening in the labor market,” said David Pakula, a Vanguard investment strategist.

The Job Openings and Labor Turnover Survey (JOLTS) data also show signs of a hiring slowdown this year. The survey of 21,000 establishments, published by the U.S. Bureau of Labor Statistics, is a measure of labor market strength and is closely watched by economists, policymakers, and financial advisors.

Vanguard’s hiring data show the female hires rate—the number of female hires as a share of all employees—gaining ground relative to the male hires rate over the past 10 years. That trend peaked in 2020, after the worst of the pandemic, when the rate of female hiring surged and exceeded that of males. It reached an all-time high of 2.3% in April 2021. Hiring in general has declined since then, however, and the female hires rate dropped back below the male hires rate as of August 2023.

“JOLTS doesn’t capture hirings by gender,” said Fiona Greig, Vanguard’s global head of investor research and policy, “but our data do, and the data illustrate gradual growth in female labor force participation prior to the pandemic and after the initial job losses of 2020. However, with hires tapering for women in particular, we may be at an inflection point.”  

The strength in the female hires rate compared with the male hires rate over the last decade could reflect a combination of greater labor force churn for women (more hires and separations), an increase in female representation in the workforce, and a greater increase in retirement plan participation for women than men. Between 2013 and 2023, the female share of employees increased from 39% to 42% even though the retirement plan participation rate grew more for men than women (8 percentage points for men and 4 percentage points for women between 2013 and 2022).²

Vanguard data are consistent with government data, which also indicate a new historic high for labor force participation among women. Despite early fears that women would not return to the workforce after leaving in 2020, the participation rate among prime-working-age women—77.8% —is now higher than it was before the pandemic.³

Vanguard’s proprietary hires data are rooted in real-world 401(k) retirement plan participant data.

It should be noted that Vanguard hires data do not capture the whole U.S. economy, since only roughly half of workers—a group disproportionately composed of higher-income workers—have access to employer-sponsored retirement plans. Moreover, employers that offer 401(k) plans tend to be larger, more mature, and concentrated in certain industries. 

• Increasing retirement readiness through higher savings rates and TDFs (article, issued October 2023)
• The state of retirement in five figures (article, issued October 2023)
• September labor market pulse: Hiring pace softens further (article, issued September 2023)