The Great Resignation, a workforce phenomenon that took the world by storm, seems to be fading away. According to the US Bureau of Labor Statistics, 3.4 million people voluntarily left their jobs in December, a significant drop from the peak of 4.5 million resignations witnessed in April 2022. This decrease resulted in the quits rate, which measures the number of people quitting their jobs as a percentage of overall employment, falling to 2.2%. It appears that the frenetic pace of job turnover during the pandemic is now stabilizing.
Despite the declining quit rate, the gap between job openings and actual resignations continues to grow, with 9 million job openings available in December, marking a two-month consecutive increase. However, many workers still express uncertainty about the state of the US economy, making them less inclined to switch jobs. This hesitance among workers to change positions is tied to their overall confidence in economic prospects.
Notably, the service sector is experiencing particular challenges due to labor shortages. For instance, the “accommodation and food services” sector, which typically has high turnover, decreased its quit rate to 4.5% in December. This sector is critical because it directly influences inflation, and the recent decline in job openings may impact prices.
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How do fluctuations in the labor market, such as the Great Resignation and its aftermath, affect the economy, businesses, and consumers?
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