A “now hiring” sign is posted in the window of a restaurant in Los Angeles on Jan. 28, 2022.
Frederic J. Brown | AFP | Getty Images
The pandemic-era phenomenon known as the Great Resignation remained a hallmark of the labor market in early 2022, according to federal data issued Wednesday.
Nearly 4.3 million people quit their jobs in January, a slight monthly decline but still near the record level set in November, the U.S. Department of Labor said. The elevated level in early 2022 comes off a year in which almost 48 million people quit their jobs, an annual record.
“The Great Resignation is still in full swing, even if quits are moderating somewhat,” Daniel Zhao, a senior economist at career site Glassdoor, said in a tweet.
Job resignations are still up 23% above pre-pandemic levels, he said.
The data suggests people aren’t quitting their jobs to exit the labor market and sit on the sidelines, economists said. Instead, the high level of resignation indicates a strong job market for workers with ample opportunities, they said.
There were almost 11.3 million job openings in January, just shy of December’s record, according to the Labor Department.
The high labor demand is pushing employers to pay higher wages as they compete to attract talent, and that higher pay is luring workers away from their current jobs.
“So far, 2022 looks a lot like 2021,” Nick Bunker, the economic research director for North America at the Indeed Hiring Lab, said of the new data. “Demand for labor is historically high and workers are quitting their jobs at historic rates to take advantage of that demand.”
Resignation rates are up most in sectors like manufacturing, leisure and hospitality, and retail trade — where demand is high and employment has been growing, Bunker said.
Employers in the private sector have raised hourly pay by about 5% in the past year, according to federal data.
But that wage growth has been higher for job-switchers than those who keep the same job — they’ve gotten raises of 5.8% versus 4.7%, respectively, according to the Federal Reserve Bank of Atlanta.
While resignations tapered somewhat in January, factors like the continued high level of job openings may keep them elevated for a while, Bunker said.
“The labor market continues to be quite hot and gives advantages to job seekers they didn’t have before,” he said.
The labor force grew by 304,000 people in February, according to the Labor Department jobs report issued Friday. (The labor force includes people who are working or actively looking for work. It remains 592,000 people shy of its pre-pandemic level.)
“High quits are decidedly not translating into workers leaving the labor force in large numbers,” Elise Gould, an economist at the Economic Policy Institute, a left-leaning think tank, said in a tweet. “In fact … we are seeing a steady return of workers back to the labor market (many of whom are getting jobs).”
The rate of hiring is higher than the resignations rate in every major industry — indicating workers are moving to other jobs, likely in the same industry, Gould added.
If job openings fall this year from current near-record levels, it would likely translate into a slowdown in resignations, too, according to economists.
“If demand for workers starts to moderate in 2022, expect the Great Resignation to begin to wane as well,” Zhao said.