April 2024
Sector Morsel: Tough hiring tests healthcare’s patients
Healthcare employment is below trend but easing small business spending on contract labor suggests less hiring pressure.
Key takeaways
- The healthcare sector has been a major contributor to overall U.S. job growth over the last year. But despite this growth, employment in healthcare remains below its pre-pandemic trend.
- Much of the growth in payrolls within healthcare has been in small businesses. Using Bank of America internal data we find that one constraint on job growth has been relatively soft wage growth compared to other high-touch services sectors, likely making it harder to attract workers.
- Firms' difficulty sourcing permanent employees has, in turn, led to extensive use of temporary labor. However, our data suggests this is now slowing, which could signal that healthcare firms may experience a gradual easing in pressure from labor shortages.
Read our full analysis for a more in-depth look at these trends.
