Tuesday, February 1, 2022

The Great Resignation was still JOLTing the job market at the end of 2021

One bit of economic data that has gotten increasing attention over the last year is the monthly Job Openings and Labor Turnover Survey (JOLTS) report. And (Tuesday’s) release indicated that we continue to see a tight labor market with lots of demand for workers.

That elevated number of openings continue to stay at this record level even as the US added more than 3 million jobs in the last 6 months of the year. And a big reason why was the Great Resignation, where Americans were quitting their jobs at record rates because they could find better work, or they were leaving the work force entirely. That trend remained high for December, although there was a bit of leveling off.
The number of quits edged down in December to 4.3 million (-161,000) following a series high in November. The quits rate was little changed at 2.9 percent. Quits decreased in health care and social assistance (-89,000), accommodation and food services (-64,000), and construction (-44,000). Quits increased in nondurable goods manufacturing (+19,000). The number of quits decreased in the South region.

Since much of America was able to be vaccinated in March, the increase in quits outpaced the increase in hires for each of the last 5 months of 2021, and December had the largest gap of them all.

While omicron had emerged in most parts of the country by the end of December, it wasn’t leading to large-scale layoffs. We’re seeing that reiterated in weekly jobless claim numberss (which are still well below 300,000 a week), or in the JOLTS report, which hit another record low as the year ended.
In December, the number and rate of layoffs and discharges were little changed at 1.2 million and 0.8 percent, respectively; both series lows. Layoffs and discharges decreased in retail trade (-67,000) but increased in federal government (+14,000). The number of layoffs and discharges decreased in the Northeast region.
I’m now seeing “experts” say that they think omicron could lead to job losses in January’s jobs report. But I notice that BLS counts on about 3 million jobs to go away each January on a raw numbers basis, and expects the accommodation and food services sector to have a January loss of around 300,000 jobs.

So if jobless claims are staying low and job openings are staying high, I’d be surprised if the headline number is a loss for January, even with omicron-related absences. In the COVID World, these seasonal swings in employment aren’t nearly as much as they used to be, and so let’s see if that means we see a seasonally-adjusted surprise to the upside on Friday.

And even if there is a slight slowing in the first couple of months of 2022, the large number of job openings shows that there is a lot of demand still around and a lot of needs for businesses to fill. So if COVID fades as an overhang for employees and availability, it should continue to be a good environment for finding jobs and getting paid more at them.

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