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More than 50 million workers will leave their jobs in 2022, breaking the previous year’s record, according to federal data, showing the resilience of a hot labor market characterized by plenty of job opportunities.
Voluntary layoffs began in early 2021 as the U.S. economy emerged from pandemic hibernation and job openings reached historic highs.
While leaving a job “was the story of 2021, 2022 was the real year of the big quit,” said Julia Pollock, chief economist at ZipRecruiter.
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Competition spurred employers to raise wages at the fastest pace in decades — especially for new hires who changed jobs — while telecommuting expanded opportunities from local to national markets.
The process of quitting smoking was known as the Great Resignation. The lyrics of Beyonce’s song are about quitting smoking and the stress of a 9 to 5 work day. Americans took to the social media site TikTok to post “Quit-Toks” and to Reddit forums to share stories about quitting and text messages of resignation to bosses.
About 50.5 million people left their jobs in 2022, down from 47.8 million in 2021, according to data from the Job Opportunities and Job Turnover Survey released Wednesday.
Workers were confident about their job prospects
Labor economists say the vast majority of people who leave their jobs do so to pursue other opportunities — not to leave the workforce altogether.
So resignations are a barometer of employees’ optimism about their ability to find new work.
According to JOLTS data, employers hired a record 76.4 million people and laid off the lowest number in 2022, 16.8 million.
“Workers are clearly confident about their future, as they continue to leave their old jobs at high rates,” said Nick Bunker, director of North American economic research at Indeed Hiring Labs.
However, there are signs that the euphoria may be fading somewhat.
According to JOLTS data, nearly 4.1 million people left their jobs in December. While still historically high and little changed from November, the figure was down 423,000 from the monthly peak a year ago in November 2021.
“It slows down a little bit,” Pollock said. But the December number is “still very high” compared to the pre-pandemic average of 2.6 million, he added.
The layoff rate rose slightly in December, though it has remained below its pre-pandemic low for 22 consecutive months, Banker said.
Wage growth is also showing signs of moderation. For example, job changers averaged a 7.7 percent wage increase in December, compared with a peak of 8.5 percent in July 2022, though still well above any previous point, according to data from the Federal Reserve Bank of Atlanta. It has been 25 years since the pandemic.
Meanwhile, job openings and hiring increased in December.
The labor market is likely to cool as the Federal Reserve continues to raise interest rates with the aim of slowing the economy and further reducing inflation. But for now, the job market still looks strong.
“The labor market moderated during the year, but employers and workers were confident and optimistic,” Banker said. And added: “The labor market has been and appears to be a solid foundation for US economic growth.”