Wealth Management

2022 was the ‘real year of the Great Resignation,’ says economist

andresr | E+ | Getty Images

More than 50 million workers quit their jobs in 2022, according to federal data, breaking a record set the year prior and demonstrating the resilience of a hot labor market characterized by ample job opportunity.

The trend of workers voluntarily leaving their jobs began in early 2021, as the U.S. economy emerged from its pandemic-era hibernation and job openings soared to historic highs.

But while quitting a job “was the 2021 story, 2022 was the real year of the Great Resignation,” said Julia Pollak, chief economist at ZipRecruiter.

More from Personal Finance:
U.S. unemployment system still plagued by delays
Despite layoffs, tech jobs are still hot in 2023
Long Covid has an ‘underappreciated’ role in labor shortage

Competition spurred employers to raise wages at their fastest pace in decades — especially for new hires who had switched jobs — while remote work expanded opportunities from local to national markets.

The trend of elevated quitting came to be known as the Great Resignation. Beyonce song lyrics riffed on quitting and the stress of a 9-to-5 workday. Americans turned to the social media site TikTok to post “Quit-Toks,” and to Reddit forums to share stories about quitting and resignation text messages to bosses.

About 50.5 million people quit their jobs in 2022, beating out the 47.8 million in 2021, according to Job Openings and Labor Turnover Survey data issued Wednesday.

Workers were confident about job prospects

The vast majority of people who quit their jobs do so to take other opportunities — not to leave the workforce altogether, labor economists said.

Quits are therefore a barometer of employee optimism about their ability to find new work.  

Employers hired a record 76.4 million people and laid off the fewest on record, 16.8 million, in 2022, according to JOLTS data.

“Workers are clearly confident about their prospects as they continue to quit their old jobs at high rates,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab.

However, there are signs that exuberance may be somewhat fading.

Nearly 4.1 million people quit their jobs in December, according to JOLTS data. While still historically high and little changed from November, the figure is down by 423,000 people from the monthly peak a year before in November 2021.

“It’s slowing down a little bit,” Pollak said. But December’s number is “still hugely elevated” relative to the 2.6 million pre-pandemic average, she added.

The layoff rate inched up slightly in December, though has remained below its pre-pandemic all-time low for 22 straight months, Bunker said.

Wage growth also shows some signs of moderating. For example, job switchers saw an average 7.7% pay increase in December — down from a peak 8.5% in July 2022 though still well above any pre-pandemic point in the last 25 years, according to Federal Reserve Bank of Atlanta data.

Meanwhile, job openings and hires increased in December.

The labor market will likely cool as the Federal Reserve continues to raise interest rates in an aim to slow the economy and further throttle back inflation. But the job market continues to look strong, for now.

“The labor market moderated through the year, but employers and workers remained confident and optimistic,” Bunker said, adding: “The labor market has been and looks to be a solid foundation for U.S. economic growth.”

Articles You May Like

Credit Suisse bondholders sue Switzerland in the U.S. over $17 billion writedown of AT1 debt
The Covid-19 pandemic worsened a child care crisis, and it’s costing U.S. businesses billions
Payhawk, a $1 billion corporate card startup, plans M&A shopping spree after 86% sales growth
Oscar Health CEO Mark Bertolini is ready to take on the employer market
Robotics startup cofounded by Synapse CEO is raising funds with exaggerated claims about GM ties

Leave a Reply

Your email address will not be published. Required fields are marked *