Matt Bush, FISM News
According to the most recent Job Openings and Labor Turnover Summary (JOLTS) report, a record-high 4.4 million people quit their jobs in September. That corresponds to 3% of the entire workforce and it is a rise from the previous high of 4.3 million way back in…August 2021.
While many are labeling this phenomenon the “Great Resignation,” a better term for it might be the “Big Quit.” The September JOLTS report shows that while little else changed, the amount of employees continued to increase dramatically:
The number of job openings was little changed at 10.4 million on the last business day of September, the U.S. Bureau of Labor Statistics reported today. Hires and total separations were little changed at 6.5 million and 6.2 million, respectively. Within separations, the quits level and rate increased to a series high of 4.4 million and 3.0 percent, respectively.
Total “separations” in the JOLTS report includes quits, layoffs and discharges, retirement, deaths, disabilities, etc. As the report states, “Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.”
What these numbers reveal is that people are comfortable quitting their jobs. When people are comfortable quitting, they almost inevitably believe that they can find another job when they are ready. This is also a sign, as Reuters puts it, that “businesses may have to continue to raise wages in order to attract workers.”
A CNBC article states, “As of September, there were seven unemployed workers for every 10 job openings — a record low — giving people the upper hand in being choosy with their next role.” In this economy, workers clearly have the upper hand and it is leaving employers scrambling to find competent workers and paying them more than they have had to in the past.
When an economy is as uneven in the job market as the American economy is right now, it is logical that inflation will continue to rise. A recent Reuters article states, “The scramble for workers boosted wage growth to an annual increase to 4.9% in October, although this has been outstripped by overall inflation, leading to a fall in real earnings.”
As minimum wage increases and employers have to pay higher salaries to compete in a dwindling workforce, the increase in costs has to be recouped somewhere, namely consumer goods. Concurrently, as employers costs significantly rise, so has the demand for consumer goods, as most people are moving back to pre-pandemic life.
This perfect storm has caused some of the highest inflation the economy has seen in years, and to top it off, the labor shortages are likely to persist for quite some time.
Even with all of the perks being offered by companies, it is unlikely they will be able to keep up with skyrocketing consumer demand as the Christmas season approaches. Airlines are cutting flights, manufacturers cannot keep up with demand, and there is sure to be shipping delays on some of the holiday’s biggest items. Plan accordingly and purchase early.