The number of workers quitting their jobs in the United States rose to 4.3 million in August – the highest churn rate ever.
Workers in the United States are quitting their jobs at record speed.
The US Department of Labor’s latest job vacancy and labor turnover survey – JOLTS – showed the number of Americans who quit their jobs rose to 4.3 million in August. That’s 2.9 percent of the total workforce in the United States, which is the highest churn rate ever.
Meanwhile, the number of job vacancies in the US fell slightly to 10.4 million in August, but after July, when a record 11.1 million jobs were begged.
A high churn rate usually signals how confident American workers are about their job prospects. However, a deeper look at the data suggests that fear of contagion with the delta variant of COVID-19 could also sideline workers.
Around 892,000 workers in the customer-centric lodging and catering sectors quit their jobs amid a surge in COVID cases in August. That is 157,000 more than in the previous month.
The number of people quitting their jobs and the sheer number of job openings are growing concerns about the country’s economic recovery.
Jobs are only officially minted when someone is hired, and the economy only added 194,000 as of September. That is the smallest monthly profit this year.
The U.S. labor market is still around five million jobs away from reclaiming the 22 million jobs lost as a result of the first wave of COVID lockdowns last year. However, according to a survey by the National Federation of Independent Business, around 51 percent of small business owners said they had vacancies that they were unable to fill in September
To lure workers off the sidelines, companies offer incentives such as signing bonuses and wage increases. About 42 percent of small business owners said they had increased their pay in the past month. That is one point more than in August and marks a 48-year record high.
Virus fears, a lack of childcare facilities, and savings accounts full of US government incentive dollars have been cited as possible factors keeping workers on the sidelines.
But what is undoubtedly a labor market for workers faces some potential headwinds.
Federal unemployment benefits expired in early September – a week before the US Department of Labor’s monthly job data was compiled, so the impact of this social safety net gap has likely not yet been shown in the data.
Also, a measure of the Conference Board’s consumer confidence – which measures how people currently think about the economy and their future expectations – fell in September after falling sharply in August.