Record-Breaking 4.5 Million Americans Quit Jobs In November As Employers Struggle To Retain Workers

Topline

Though the number of job openings fell more than expected in November, the number of Americans quitting their jobs jumped to record territory, the Bureau of Labor Statistics reported Tuesday, further illustrating the struggle employers are facing in filling—and retaining—jobs during the pandemic. 

Key Facts

The number of people quitting their jobs in November jumped to a record high 4.5 million—surpassing the previous record of 4.4 millions set in September, according to the Labor Department’s job openings and labor turnover report.

Meanwhile, there were about 10.6 million open jobs at the end of November, down 529,000 from a month prior, when openings nearly matched the record 11.1 million set in July.

Despite red-hot worker demand and the high quit rate, the number of hires in November was little changed at 6.7 million, and layoffs and terminations also stayed flat, at 1.4 million.

What To Watch For

The Labor Department’s jobs report for December is set to be released Friday. Economists expect the unemployment rate to tick down to 4.1% from 4.2% one month prior. That would be the lowest point in more than a year but still well above pre-pandemic levels of about 3.5%.

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 a disappointing jobs report for November, when the United States added less than half of the jobs economists expected. 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. And another 1.6 million Americans are still reporting concerns about the spread of Covid-19 as their main reason for not working.

Further Reading

U.S. Labor Market Recovery Loses Steam With A Sluggish 210,000 New Jobs Last Month (Forbes)

Goldman Warns Economic Recovery Will Slow As 65 Million Americans Stand To Lose $300 Child Tax Credit Payments Next Month (Forbes)