In the wake of the unprecedented, albeit brief jobs crisis brought about by the Covid-19 pandemic, a new trend emerged in the U.S. labor market in 2021, as tens of millions of Americans voluntarily left their jobs. In 2022, more than 50 million Americans took part in 'the Great Resignation', as workers were confident to find better pay or better career opportunities elsewhere in a red hot labor market. After peaking between November 2021 and April 2022, when almost 4.5 million people quit per month on average, the movement has steadily been losing steam throughout 2023, leaving the number of quits below four million in 10 of the first 11 months of the year. According to the latest JOLTS report, 3.47 million Americans left their job in November, the second lowest reading since February 2021.
The number of quits is now back to pre-pandemic levels, when the balance of power had already shifted in favor of workers, as the number of job openings exceeded the number of unemployed workers for large parts of 2018 and 2019. While that is still the case, the labor market appears to be coming off the boil slowly, after proving surprisingly resilient in the face of the Fed's aggressive continued efforts to tame inflation. Lurking recession fears have also played their part in convincing more workers to stay put rather than to risk being unemployed at the wrong time. As our chart illustrates, the number of quits typically declines sharply in times of recession, as it can be very tough to find a new job during an economic downturn.