The Wall Street Journal said that fewer resignations reflect less confidence in the US labor market amid news of layoffs and expected slower growth.
Workers called it quits less frequently in 2023, a sign confidence in the labor market is falling as the US economy is expected to slow and Americans are taking longer to find new jobs.
Americans quit 6.1 million fewer jobs last year than in 2022 a decline of 12%, the US Labor Department said Tuesday. In December alone, quits fell to the lowest monthly level in nearly three years, after adjusting for seasonal fluctuations.
The declining quits rate will limit how fast wages grow, as companies are less pressured to attract and keep workers, The Wall Street Journal quoted senior US economist at Deutsche Bank Brett Ryan as saying. That could be good for the Federal Reserve, which has been working to tame inflation, but not appreciated by workers seeking raises.
Vacancies increased to 9 million from an upwardly revised 8.9 million reading in the prior month, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed Tuesday. The December figure exceeded all estimates in a (Bloomberg) survey of economists.
"On the surface things look really good and robust but when you dig deeper it's a labor market that is being driven by a narrower set of industries and is showing signs of substantial slowing," said Brett Ryan. Just three industries, leisure and hospitality, government and healthcare, accounted for the bulk of job creation in 2023, he added.
The rate at which employees were quitting late last year fell below the pace recorded just before the pandemic began. The quits rate in December was a seasonally adjusted 2.2%, down from 2.6% a year earlier.
Fewer resignations could mean workers are less confident in their ability to find a new job or more content in their current roles. The total number of job quits declined to 44.5 million in 2023 from 50.6 million in 2022, which was the highest on record, The Wall Street Journal said.
That is a turnaround from the years just after the pandemic took hold, when resignations surged and companies faced labor shortages. In 2021 and 2022, employers put up billboards seeking workers, eliminated background checks, offered big raises and handed out signing bonuses to restaurant and factory workers.
In more recent months, prospective job seekers have seen news of high-profile layoffs, smaller pay bumps and sharp slowdowns in hiring in certain industries. Those pockets of weakness stand in contrast to years of consistent overall job growth and a historically low 3.7% unemployment rate at the end of last year.
A recent LinkedIn survey found that most workers are thinking about changing jobs this year but many aren't finding opportunities.
Some said that they have sent out hundreds of applications through online job sites but hasn't found a better job so far.
The rate at which employers hired new workers has fallen below prepandemic levels in recent months. The hiring rate slowed to 3.6% in December from 4% a year earlier. That could mean that companies are in a wait-and-see mode, wanting to keep their current employees but not hiring new ones, economists said.
While not quitting as much, most workers aren't being forced out either, despite some notable job cuts. There were 1.6 million layoffs in December, up slightly from 1.5 million a year earlier, and still below the level before the pandemic began, the paper said.
Technology companies Microsoft and eBay, media companies such as the Los Angeles Times and jeans maker Levi Strauss have recently said they are reducing staff. United Parcel Service said Tuesday that it plans to cut about 12,000 jobs this year. Economists note that there is always churn in the economy and that the announced cuts are small relative to 157 million jobs on US payrolls, The Wall Street Journal said.
