|
Getting your Trinity Audio player ready...
|
Another 4.5 million workers quit in the 8th month of record exits, and it shows how the Great Resignation is here to stay
A record 4.5 million Americans voluntarily left their jobs in November, according to the Bureau of Labor Statistics. This pushed the quits rate to 3%, matching the high from September. Workers particularly quit their jobs in the hospitality industry, which had by far the highest quits rate at 6.1% in November, as well as health care.
Key Points:
- A record 4.5 million workers quit their jobs in November, while job openings declined to 10.6 million.
- Restaurant and health-care workers were responsible for much of the surge in “quits.”
- Manufacturing activity also expanded in December, but less than expected, according to the latest ISM report.
- Newly released data shows that another record-breaking number of Americans quit in November.
- Low-wage industries saw the highest number of workers quitting, even while hiring stayed strong.
- It suggests that the shortage of workers in low-wage positions is likely to persist in 2022.
In November, workers seemed to celebrate two American traditions: Thanksgiving and quitting their jobs.
Workers quit their jobs in record numbers in November while the total employment openings pulled back a bit, the Labor Department reported Tuesday.
The so-called quits level surged to 4.53 million for the month, according to the department’s Job Openings and Labor Turnover Survey. That represented an 8.9% increase from October and broke September’s high-water mark of 4.36 million. As a percentage of the workforce, the quits rate of 3% matched September’s mark.
In a phenomenon that has been labeled the Great Resignation, workers have been leaving their positions partly in response to increased mobility in the labor market as job openings strongly outnumber those looking for work.
For November, the number of job openings totaled 10.56 million, lower than the 11 million estimate from FactSet and a decline from 11.09 million in October. The level, however, was well ahead of the 6.88 million total of those out of work and looking for jobs in November, according to the government’s nonfarm payrolls report for that month.
The job openings rate was 6.6%, down from about 7% in October but well ahead of the 4.5% from the prior year.
“The Great Resignation shows no sign of abating, with quits hitting a new record. The question is why, and the answers are for starkly different reasons,” said Robert Frick, corporate economist at Navy Federal Credit Union. “COVID-19 burnout and fear are continuing, but also, many Americans have the confidence to quit given the high level of job openings and rising pay.”
A separate economic report Tuesday showed that manufacturing activity in December was slower than expected.
The ISM Manufacturing Index registered a 58.7% reading, below the 60% expectation and a drop from 61.1% in November.
The biggest subtractions from the index came in supplier deliveries, which fell 7.3 percentage points, and a surprise plunge in prices, which dropped 14.2 percentage points at a time when inflation is running at its highest level in nearly 40 years. Survey responses indicated prices are declining some for steel and oil.
A reading over 50% signals the manufacturing sector is expanding in general, while a reading under 50% is a sign it is mainly contracting.
On the upside, the employment index rose to 54.2%, a gain of 0.9 percentage point and a sign that hiring remains strong.
The JOLTS report showed, though, that there are some displacements happening in the labor market.
At an industry level, the openings rate in leisure and hospitality slid to 8.7% from 10.1%, due a drop in accommodation and food services to 8.9% from 10.5%. The hire rate in leisure and hospitality edged higher to 8.1% but the quits rate jumped a full percentage point to 6.4%.
The health-care and social assistance industry also showed stress as Covid cases surged, with the quits rate in that field hitting 3% for the month, the highest on record.
The report comes three days before the Labor Department releases its closely watched nonfarm payrolls count for December. Economists surveyed by Dow Jones expect growth of 422,000 jobs and the unemployment rate to nudge lower to 4.1%.
The data does show that workers are parachuting out of a certain-type of job: Low-wage work. Quits in leisure and hospitality hit a record high in November; 6.9% of the accommodation and food services workforce quit in November. All told, over 1 million leisure and hospitality workers quit. Retail trade workers also quit well above the average, with the industry losing 4.4% of its workforce to quitting.
Workers leaving low-wage jobs en masse — and at far higher levels than other industries — supports a theory that current labor crunches are more akin to a wage shortage than a labor shortage. Switching jobs is one reliable way to make more money, and the latest data shows low-wage workers are doing just that.
Of course, there’s also the same labor constraints that have been dogging the economy since the pandemic’s onset. Childcare — or lack thereof — has kept some parents out of the labor market. While the latest data release doesn’t factor in the impact of the Omicron variant, the skyrocketing cases might only exacerbate childcare issues, along with workers’ fears about returning to or remaining at in-person work.
What remains to be seen is if labor shortages in their current form do end up becoming permanent — and if worker power will continue to accrue. But it doesn’t seem like the quitting will ease anytime soon, suggesting that low-wage employers may still face a crunch as workers find higher pay elsewhere.
Did you know that if you subscribe to our website, you will receive email notifications whenever content changes or new content is added.
1. Enter your e-mail address below and click the Sign Me Up button.
2. You will receive an email asking you to confirm your intention of subscribing to our site.
3. Click the link in the email to confirm. That’s all there is to it! Note: if you wish to unsubscribe from our site, click the unsubscribe link at the bottom of the email you received.
Then indicate you no longer wish to receive our emails.
Thank You
IWeb TEFL Team