Is the Great Resignation Over? The Data Shows That It Is
Key takeaways
- In 2022 we saw 50 million people quit their jobs, but these figures have slowed in the troubled economic landscape
- 3.9 million quit in March, the lowest level since 2021
- A cooling jobs market is good news for lowering inflation and bringing an end to the Fed’s monetary tightening policy
The Great Resignation has raged on for some time, inspiring plenty of ‘QuitTok’ content and the gleefully unemployed egging others on to regain their freedom. But then things with the economy got real — and fast.
Now the data seems to suggest amid growing unemployment figures, fewer job openings and headline quitting numbers that we’ve called time on the Great Resignation as recession talks grow and more people stay put. Here’s what it means for investors and the economy.
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Is the Great Resignation over?
2022’s Job Openings and Labor Turnover Survey revealed over 50 million Americans had quit their jobs that year, beating 2021’s record and making employers everywhere quake in their boots at how they would keep staff.
But as soon as the economy turned, so did the trend. So far in 2023, the same survey saw the number of people in March saying ‘sayonara’ to their employers was 3.9 million, the lowest figure since 2021.
Not only are fewer people moving, but when they do, they’re getting a smaller pay boost. In April, people changing jobs saw a 13.2% boost to their base pay, down from 14.2% just a month before and continuing a year-long slowdown, according to the ADP.
2022 was when everyone was quitting their jobs but in comparison, 2023 has been the year of staying put — with an added sprinkle of mass layoffs as the unfortunate cherry on the cake.
What does it mean for investors?
We all know the Fed has been trying to hammer down inflation with the brute force of an eye-wincingly fast monetary tightening policy, raising interest rates ten times in a row to tame the beast.
Inflation is currently at 4.9% in the US — much better than the 9.1% peak in the summer of 2022, but still pretty far off the Fed’s 2% target. The jobs market has been a factor in sticky inflation, as record unemployment lows and consistent pay increase figures have been key indicators that monetary tightening isn’t working as quickly as it should be.
So while fewer job hoppers, role openings and mass layoffs look bad — from an economic perspective, it means interest rates can hopefully return to more sustainable levels quicker.
The bottom line
The Great Resignation may be over, but it’s as much a cultural shift against working practices as an economic one. We could see quitting rates pick up again once the financial picture recovers — or the Great Resignation will remain a pandemic relic sitting on the shelf. Only time will tell.
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