Mon. Jan 24th, 2022

A record 4.5 million Americans resigned their jobs in November, while jobs have historically remained high.

If there is any doubt about exactly who has the upper hand in the US labor market these days, Tuesday’s latest figures from the Department of Labor should calm them down – because workers did not have as much power to call in the shots. decades.

The latest job survey and labor turnover survey (JOLTS) released on Tuesday showed that a record 4.5 million Americans voluntarily quit their jobs in November. This is an increase of 382 000 compared to the previous month.

Meanwhile, the number of jobs fell by more than half a million from October to 10.6 million in November, but it is still significantly high by historical standards.

Customer-oriented leisure and hospitality work – which includes hotels and restaurants – as well as retail, led most workers to the exits. The highest number of jobs also remains in those sectors, despite declines from October to November.

The record high resignation rate combined with near-record jobs indicates that workers are leaving their current employers for better deals, as businesses increase their salaries and sweeten benefits to attract scarce job seekers.

The economy has yet to regain all the jobs it lost in the opening days of the coronavirus pandemic back in 2020 and a continuing shortage of workers has weighed on job creation. The US has added a disappointing 210,000 jobs in November. And while the labor force participation rate – which captures people who are either working or actively looking for work – picked up in November, it is still 1.5 percentage points shy of pre-pandemic levels.

Economists are scratching their heads over why there are so few workers available for businesses to hire, but factors ranging from fear of contracting COVID-19, to childcare challenges, baby boomers taking early retirement, and workers unlocking their entrepreneurial spirit to start businesses their own are believed to be factors.

Whatever the cause, workers are in a good bargaining position – and that leverage is evident in average hourly earnings, which rose 4.8 percent in November from the same period a year ago.

Yet that wage bump does not keep pace with inflation. The Fed’s Preferred Measure of Underlying Inflation in the Economy – Personal Consumption Expenditure – rose 5.7 percent in November compared to a year ago.

The November JOLTS survey was done before the Omicron variant of COVID-19 passed through the US. But another important reading on the U.S. labor market is due Friday with the release of the December Labor Report.

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