February 14, 2022

Choose any metric you’d like, it’s clear the U.S. job market is strong and getting stronger.

The pandemic introduced a new set of labor dynamics. With the labor market being extremely tight right now, employers are hanging on to existing workers as best as they can. And yet, a record 4.5 million Americans voluntarily left their jobs in November 2021.

That pushed the so-called “quits rate” to 3%, matching the high from last September. This high quits rate is a symptom of the tight labor market. Today, many workers can quickly find a new (and often better) job with relatively little effort.

This is especially true in the hospitality industry. It had the highest quit rate in November (6.1%). Health care had the same rate. The resignation numbers in transportation, warehousing, and utilities also increased.

So, workers are quitting at an historic rate. The low-wage sectors are affected most. Here’s a big question for 2022 – will this continue?

Hotels and restaurants registered the biggest increases in separations while also logging the biggest declines in open jobs. The U.S. had 10.6 million jobs to fill in November, a slight decline compared with 11 million in October. Unfilled U.S. jobs peaked at 11.1 million last July.

See, the people who quit are taking other jobs, not leaving the workforce. As a result, the labor market is gaining a ton of jobs every month, and that’s reflected in the average number of weekly jobless benefit claims, which fell to 199,250. That’s the lowest four-week moving average since October 1969.

It’s a tight labor market, meaning wages will likely have to go even higher. That will keep upward pressure on inflation. But at least America is back to work.