A phenomenon that defined the pandemic-era labor market is over: the Great Resignation — workers furiously quitting for new, likely higher paying jobs — is a thing of the past.
Why it matters: The historic surge of quitters was a symptom of an on-fire labor market, where demand for workers far outstripped supply of them.
- Now the job market may be entering a different era — one that more closely resembles pre-pandemic times.
By the numbers: The quits rate fell to 2.4% in April, according to the Job Openings and Labor Turnover Survey, released this morning.
- That is just a tick (0.1 percentage point) higher than the quits rate in February 2020 — and roughly in line with the average quits rate in 2019.
- Even leisure and hospitality workers, once the poster child for the quits boom, are returning to pre-pandemic norms: the quits rate in this segment hit 4.6% in April — very close to the January 2020 rate of 4.4%, and well-below the peak 5.8% recorded last summer.
What they’re saying: “We are pretty much back to a strong, robust labor market, but one that is no longer overheating,” says Julia Pollak, an economist at ZipRecruiter.
- “One that isn’t plagued by widespread labor shortages that are wreaking havoc across the economy, and causing firms to offer off-cycle wage increases and dispense of all hiring requirements. The deck isn’t totally stacked in jobseekers‘ favor anymore.”
Flashback: At the height of the Great Resignation, the overall quits rate most recently peaked at 3% in April 2022, when there were roughly 4.5 million quits in a single month.
- Turnover of that magnitude had never been seen before — at least not since the Labor Department started collecting the data in 2000.
- Workers were in such high demand that they felt confident enough to ditch current gigs for new (likely higher paying) ones.
The bottom line: Americans who did job hop over the past few years have seen heftier pay gains. But that phenomenon, too, is fading — another sign of some heat coming off the labor market.
- Job-changers saw annual pay grow more than 13% in April, according to payroll professor ADP — more than double the annual rate of job-stayers.
- Still that was the slowest pace of growth since November 2021.