This fall, Americans continued to quit their employment in large numbers as the labor market heated up, indicating the economy retained its pace despite the COVID-19 pandemic.
On Wednesday, Dec. 8, the Labor Department reported that 4.2 million workers left their jobs in October, a decrease of roughly 205,000 from September but still close to a record high.
Nonetheless, the quantity of labor market change indicates that job searchers now have more leverage and chances than they have had for many years.
Job opportunities increased by 431,000 to 11 million, led by 254,000 vacancies in the hospitality and food services sectors. These industries were devastated by the pandemic but have recovered somewhat as the number of cases caused by the coronavirus’s Delta strain began to decline in some areas. As a result, job vacancies were also near a record level.
The majority of economists anticipate that hiring will remain robust in the months ahead.
Head of economic research at “Indeed Hiring Lab,” Nick Bunker, said: “It appears as though the increase in openings is being driven by a decline in coronavirus cases.”
Bunker continued: “While quitting levels were down in October, they still remain higher than they’ve been in quite some time. Right now, we are in a labor market that is hot, and bargaining power is more tilted toward job seekers than in the recent past.”
Hiring at restaurants, bars, and tourist businesses has been unpredictable, waxing and waning in lockstep with the virus. If the Omicron variant proves to be as disruptive to daily life as Delta was, those achievements may be jeopardized.
Employers added only 210,000 positions last month, far less than the 546,000 added in October. However, according to a poll source, the jobless rate fell from 4.6% to 4.2% last month.
There are many unfilled positions, and the declining unemployment rate demonstrates why many businesses have complained about not locating enough workers, resulting in salary increases, particularly in lower-paid areas where earnings stagnated for years.
According to the Bureau of Labor Statistics, average hourly wages for non-supervisory employees increased by 8 cents to $31.03 in November and were 4.8% higher than last year.
The increase in earnings and prices has heightened awareness of the threat of inflation.
Policymakers, notably Federal Reserve Chairman Jerome Powell, assert that the price hikes are primarily due to transient pandemic anomalies. However, in previous congressional testimony, Powell indicated that the central bank might encourage growth and maintain price stability.
While the federal minimum wage is only $7.25 an hour, companies in many urban areas have difficulty finding people willing to work for less than $15 an hour. In many locations, help needed banners adorn businesses and restaurants, and workers have a greater say over the perks they get and the amount of vacation they may take.
“It’s not just quitting for the sake of quitting, it’s quitting to find better employment,” Gregory Daco, top U.S. economist at Oxford Economics, explained. He anticipates that companies will add between 300,000 and 350,000 jobs per month in 2022.
However, Daco noted that Omicron would influence the economy for the next three months.
“We know that prior waves have been damaging in terms of economic activity, we don’t know yet for certain, but it seems undeniable that Omicron will be a negative on economic activity over the winter,” Daco concluded.