Chief Executive Officer at Automatic Data Processing
So we obviously don't have the market cornered on economic forecast. We do have a reasonable amount of data, particularly on what I would call the near-term next few quarters, I would say. But when you look at the last two, three, five years, 10 years, really, as long as I've been doing this, you have to be really careful about taking economic forecasts at face value. So you have to be careful. You have to be prepared for all eventualities. And that's why we like to call ourselves an all-weather business model because I think we we actually perform, I think, through a variety -- obviously, better in some than others.
But I guess that's the way of saying we're not obsessed with economic forecast because if I had taken economic forecast at face value over the last three or four years, we would have made numerous mistakes. And I think all I have to do is go back. I know nobody does this because otherwise there wouldn't be -- economists wouldn't exist. But if you look at what economists forecast 12 months prior and then what actually happened -- 0or 20 months prior to what actually happened, that's not really the right way to run a business. But it doesn't inform our decisions right, and our planning.
And as you mentioned, what happened this year in terms of our fiscal year planning is we thought kind of common sense told us that some of these things were going to happen like normalization of downmarket retention, right, towards hopefully still above pre-pandemic levels but not at the kind of levels they were when the government was providing so much support for small businesses that you could just see it in the data in terms of the drop in bankruptcies and out of business and so forth. So we expect some normalization there.
Likewise, pay per control, it's not -- you just don't make numbers up. Like we -- if you assume that you reach kind of "full employment", and that the population and employment [Technical Issues] loyal people is growing at a certain rate, you can kind of back into kind of a normalized pays per control rate, and then you sprinkle in a little bit -- maybe there's going to be some economic weakness in the back half. And I think what we signaled and what we have in our plan is, I think, kind of flattish pays per control growth, which to me personally is feeling conservative right now based on the -- we feel like we have this kind of continued strength into this quarter, and that typically doesn't fall off the cliff right away. But maybe that happens in the first quarter of '24 that it becomes flattish. I don't know. But I know that right now, there are definitely still -- we got back to what employment was pre pandemic, but the population also grew and the employable number of people grew. So labor force participation is still below where it was before. So there is definitely still room for some employment growth there.
So this could be a very strange slowdown, right, or if you want to call it a recession, where it's, I think Danny calls it a labor full recession where it doesn't feel like employment, at least the stuff that we look at background checks, job postings, et cetera. I mean if you look at the jokes, you look at everything, there's still a lot of -- we had 260,000 jobs created -- and that wasn't $500,000, it wasn't $1 million, but in any other environment, that would be like an incredibly strong number, but it's clearly is clearly slowing. But everything we see is that the labor markets remain, again, in the time horizon that we have visibility to pretty strong or certainly not as strong as a year ago or when we were in the middle of the the recovery from the pandemic, but that's really more of the comparisons than kind of anything underlying.
So I think we're just heading back to kind of more normal rates, but in an unusual way where the labor market doesn't appear to be the leading the leader in the slowdown. It appears to be people spending less on stuff that they spent a lot of during the pandemic, if I can be bold. That might be like exercise bicycles. It might be things like grills, like -- and maybe even, unfortunately, for a company that's close to my heart, software, right, and some things that are -- that you have these kind of, unfortunately, fluctuations of demand that we've never seen before. And so the now how do you predict and forecast how that all kind of lands in the medium to longer term. It's very, very hard for any company to do.
But specifically for us, labor is still strong. As long as labor is strong, our clients are still looking for tools to employ, to hire and to manage that labor. And we have this other little weird thing happening to us, which is really fantastic, which is interest rates are rising. And the rising in the face -- I mean, typically, when interest rates are rising, the economy is slowing, and that's exactly obviously what the intent of the Fed is. But right now, you're kind of at this point where we're getting this big tailwind from interest rates, and it doesn't feel like that's going to change again in the near term.
It doesn't mean that rates won't stop increasing, but if rates stop increasing, like, for example, like in the spring of '23, and they stay there, home run for ADP. All of you and everybody internally here at ADP make fun of me when I used to talk about how our balances in 2008 were like $15 billion and they had grown to $30 billion, but our client funds interest had been cut almost by two thirds because of interest rates. And I used to say, "Can you imagine if interest rates go back to where they -- near back to where they were back then, but our balance is now are $33 million and growing, I think it was 9.5% this quarter? Wouldn't that be amazing?" And that's exactly what's happening.
So I'm leaving a little bit of gas in the tank for Maria. Well, actually, I can't take credit for that. I appreciate Chairman Powell helped with that. But we -- I think we have some gas in the tank here with interest rates as well, which again, is a little unusual, but I don't know if you want to call it a hedge to our business model, but -- it's definitely welcome because we are -- as you know, we always carefully watch our expenses and everything in ADP, but it's a much better place to be from an ability to invest and an ability to weather when you have this significant tailwind, which is not a secret. I mean I think Don laid out the numbers, and you can do the math. It's a pretty big tailwind.