The rate at which Americans leave their jobs has progressively decreased over the past year from a record high back to pre-pandemic levels, which appears to signal the end of the labor market trend known as the “great resignation,” according to labor economists.
The “quits rate” fell to 2.4% in April, down from 2.5% the month prior and from a 3% peak in April 2022, the U.S. Bureau of Labor Statistics reported Wednesday in the Job Openings and Labor Turnover Survey.
This rate is the share of monthly quits (i.e., voluntary departures by workers) relative to total employment. It is now roughly on par with the monthly pre-pandemic average between 2.3% and 2.4% in 2019.
“I think the great resignation as we know it is over,” said Daniel Zhao, lead economist at career site Glassdoor.
“We are much closer to the labor market we had in 2019, which was hot but not overheating,” he added.
Workers enjoyed historic leverage amid Covid
Most workers who quit their jobs do so for new employment elsewhere. Quits, therefore, serve as a proxy for workers’ willingness or confidence in their ability to leave a job.
Quits started to surge in early 2021 as Covid-19 vaccines rolled out to the masses and the U.S. economy started to reopen.
Due to a gap between the demand for workers from business and the number of job seekers, workers now possess a level of power in the labor market that has never before existed. To compete for talent that was in short supply, employers increased pay at the quickest rate in decades.
Americans quit their jobs in historic numbers due to higher income and a plethora of work possibilities. This so-called great resignation was largely about finding a better gig rather than not wanting a job, economists said.
About 50.5 million people quit in 2022, besting the prior record set in 2021.
“The pandemic gave workers more leverage than they’d ever had,” said Julia Pollak, chief economist at ZipRecruiter.
The dynamic has changed, however. The U.S. labor market has gradually cooled, staffing shortages have become less of an issue and workers appear more nervous about the job outlook, Pollak said.
In short, the labor market is returning to normal, and the balance of power has shifted, she said.
While workers are unlikely to be “handed jobs on a platter” anymore, conditions remain favorable for them, Pollak added.
“There’s good normal and bad normal,” she said. “We’re still very much in the ‘good normal’ world.”
Conditions are still favorable for job seekers
It’s unclear if the labor market will cool further from here. The Federal Reserve forecasts a mild recession later this year, for example. That outcome is not assured, of course.
In fact, certain metrics in the BLS’ JOLTS report suggest the job market became somewhat more favorable for workers in April. Job openings a proxy for employer demand for workers increased to 10.1 million after three consecutive months of declines, for example.
While quits and job openings told different labor market stories in April, quits are generally a less volatile and more reliable indicator, economists said.
“Looking at the hard economic data, things are still fairly strong” for job seekers, Zhao said.
Due to economic uncertainty, however, it’s “more important than ever” for workers to do their research before accepting a job, he added.
That might mean researching the financial stability of the company to which they’re applying and whether the company has had recent layoffs, Zhao said. It may also mean reaching out to company employees in their job network to gauge sentiment and confidence, he added.
Last week, the Federal Trade Commission issued a notice cautioning customers to be wary of false job postings made by con artists. They repurpose outdated ads from real employers and trick applicants into sending them money, the FTC said.
