U.S. workers quitting reaches record high, job openings edge down in September

Washington, November 12 (BUS) – The number of Americans who voluntarily quit their jobs rose to a record high in September while job opportunities remained above pre-pandemic levels, a sign that companies may have to continue raising wages in order to attract workers.

Reuters reported that the Labor Department’s monthly Job Opportunity and Employment Turnover Survey, or JOLTS report, released Friday, reflects a mixed economy with strong demand against labor and goods shortages, pushing overall inflation to its biggest annual gain in 31 years.

Wage inflation shows few signs of abating even as the rate of daily cases of coronavirus infection declines, with employers in nearly every industry competing to attract workers and a three million reduction in the workforce compared to pre-pandemic levels.

The scramble for workers pushed wage growth to an annual increase of 4.9% in October, although general inflation has outpaced that growth, lowering real earnings.

A separate survey by the University of Michigan, also Friday, showed panic among consumers as sentiment for the economy fell to its lowest level in a decade, with few policymakers believing they were taking enough steps to tackle inflation.

Smoking cessation cases rose by 164,000 in September, bringing the total to a record 4.4 million. The quit rate is seen as a good measure of confidence in the labor market as workers leave when they are more secure in their ability to find a new job.

There were 56,000 people who stopped working in the arts, entertainment and entertainment industry while 47,000 left in the other services category. State and local government education saw 30,000 leave.

Michael Pierce, chief US economist at Capital Economics in New York, said after the report.

The Federal Reserve has so far resisted calls for stronger action to combat higher-than-expected inflation, arguing that it remains temporary even if it continues until next year. The central bank announced at its latest meeting that it will start scaling back its massive bond-buying program this month, which is seen as a preliminary step to raising interest rates from their current level near zero. Investors are currently anticipating a rate hike in mid-2022.

Jobs, a measure of labor demand, fell by 191 thousand to 10.4 million on the last day of September. Employment also remained largely unchanged at 6.5 million in September. The number of job vacancies was little changed in all four regions as job openings increased in health care and social assistance, and state and local government, excluding education.

Last Friday, the government reported that non-farm payrolls increased by 531,000 in October after posting a gain of 312,000 in September. Job growth averaged 582,000 per month this year.

The labor shortage may last longer even as the delta wave of COVID-19 infections dips from its mid-September high. It appears that the all-time high savings fueled by government aid, as well as a strong stock market and record house price gains, will continue to provide a short-term buffer as workers consider when to enter the labor market again. Higher-than-normal early retirements also play a role.

There is hope, however, that as infections decline and schools reopen fully for personal learning, more people will return to the workforce once the excess savings helped by generous government aid, some of which have ended, will be exhausted.

Fewer Americans feel better about the economic outlook, at least in the short term. A University of Michigan consumer survey showed that US consumer confidence fell in early November to its lowest level since November 2011 as rising inflation lowered living standards for households. Its index fell to 66.8 in November’s initial reading from October’s final reading of 71.7. Economists polled by Reuters had expected a reading of 72.4.

“One in four consumers reported inflationary cuts to their living standards in November, with lower incomes and older consumers expressing the biggest impact,” survey director Richard Curtin said in a statement.

He added that there is a “growing belief among consumers that effective policies have not yet been developed to limit the damage caused by high inflation.”

The survey showed that consumers expect inflation to accelerate next year at 4.9%, the fastest since 2008, although they still expect it to decline in the medium term, with the five-year forecast at 2.9%.

The survey’s consumer expectations index fell to 62.8 – the lowest since October 2013 – from 67.9 in October. Its measure of current conditions fell to 73.2 – the lowest since August 2011 – from 77.7.

NS