Topline
Though the number of layoffs hit a record low in December, the number of Americans quitting their jobs remained near record territory, the Bureau of Labor Statistics reported Tuesday, further illustrating the struggle employers are facing in filling—and retaining—jobs during the pandemic.
Despite red-hot worker demand, the number of hires fell last month, to 6.6 million.
Key Facts
The rate of people quitting their jobs was “little changed” at 2.9% in December, with the number of Americans who quit edging down from a record 4.5 million in November to 4.3 million, according to the Labor Department’s job openings and labor turnover report.
There were 10.9 million job openings at the end of December—edging up from 10.6 million one month prior and not too far from the record 11.1 million set in July.
Meanwhile, the number and rate of layoffs hit 1.2 million and 0.8%, the lowest levels on record, the government said, while the number of hires fell to 6.6 million, from 6.7 million one month prior, despite the red-hot worker demand and high quits rate.
What To Watch For
The Labor Department’s jobs report for January is set to be released Friday, and the White House has already warned the data could be disappointing in light of last month’s surge in Covid infections. “If you think about omicron in early January, and the impact it was having in terms of the number of people who were out sick, we do expect there to be some real variation in the data,” Brian Deese, President Joe Biden’s top economic advisor, said last week, adding that Americans “need to be prepared for January employment data that could look a little strange.” Economists expect the unemployment rate to remain flat at about 3.9%, according to Bloomberg.
Key Background
Though waning Covid-19 infections helped usher in a streak of promising labor market developments in the fall, a recent uptick in cases coincided with vastly disappointing employment reports for November and December, with the United States adding less than half of the jobs economists expected each month. The “weaker-than-expected jobs report adds to the fear we’ve seen with the omicron variant, and it may stoke fears of stagflation, which consists of slower economic growth and higher inflation,” says Jay Pestrichelli, the CEO of Florida-based investment firm Zega Financial. The delta variant-spurred wave of Covid-19 infections set a cautionary precedent earlier this year, fueling struggles that culminated with the job market’s worst month of the year in September.
Tangent
Though jobs are “abundant,” analysts at Goldman Sachs have lowered their projections for labor force participation to just 62.1% by the end of the year—meaning the number of people working or looking for work should remain at 45-year lows. Led by Goldman’s Jan Hatzius, the analysts point out most of the 5 million people who have exited the labor force since the start of the pandemic are over the age of 55 and likely won’t ever return to work, due largely to early and natural retirements of about 1.5 million and 1 million, respectively. Another 1.6 million Americans are still reporting concerns about the spread of Covid-19 as their main reason for not working.
Further Reading
Executives Say They’re Worried About Keeping Talent. Less Than A Third Say They’re Committed To Keeping Increased Pay. (Forbes)
New Jobless Claims Keep Unexpectedly Spiking As Omicron Surge ‘Taints’ Economic Recovery (Forbes)
U.S. Posts Disappointing 199,000 New Jobs Last Month—Omicron Surge Could Make It Worse (Forbes)
Source: https://www.forbes.com/sites/jonathanponciano/2022/02/01/near-record-43-million-americans-quit-jobs-in-december-as-layoffs-hit-lowest-level-ever/