Originally written August 15th, 2022:
The peak in two-week-notice-giving may be behind us after all. For context, job quitting activity is still remarkably high in the United States. 2.8% of the workforce left their jobs in June 2022, down from a level of just over 2.0% in the years leading up to the pandemic. However, a cascade of quitting employees drove the job quit rate to an all-time (or at least post-2000, when data became available) high of 3.0% only months ago, in November 2021. While the quit rate is still elevated in historic terms, it’s beginning to cool off.
What does this data tell us about the state of the U.S. labor market? For one, a higher quit rate is evidence of a tight labor market, as discussed by the Goldman Sachs economics department in recent interviews. When employees are frequently quitting jobs, they are demonstrating their ability to find better alternatives when they are unhappy in a role. Job quitting makes labor more scarce and (in theory) more expensive as a result.
We’ve written about the U.S. labor market in the past, covering youth unemployment, job turnover in the pandemic, and the constant race between wage inflation vs. cost-of-living inflation.
Let us know in the comments if you think job quits will continue, or if recession fears will drive a flight to job security and longer employment tenures.