A record 4.3 million American workers left their jobs in August. Most of the workers came from the foodservice and retail industries. This is according to a Labor Department report released Tuesday.
4.3 Million American Workers Quit Their Jobs
The quit rate rose to 4.3 million jobs, the most in a month since December 2000. This is equivalent to 2.9%, which is an increase of 242,000 resignations compared to July 2021 (2.7%).
A total of 892,000 American workers in the foodservice and accommodation industries left their jobs. Meanwhile, 721,000 additional workers from the retail industry walked away from their jobs. Another 534,000 workers in the health care and social assistance industry also quit.
Historically, American workers quitting their jobs means people are more confident in finding new ones. For these pandemic-laden times, workers left their jobs due to health and safety concerns. They also need to address issues of child care for the kids they will leave at the house when they go off to work.
Job Quit Rates Surges Along With Rise in COVID-19 Cases
Elise Gould, the senior economist at the Economic Policy Institute, says the pandemic contributed to the rise in quitting workers.
“As job openings and hires fell in August, the quits rate hit a new series high, surging along with the rise in Covid cases and likely growing concerns about working in the continuing pandemic,” she said. Since then, COVID cases nationally are now declining. However, health experts are worried another surge is set to happen this coming winter.
As hiring numbers fell, job openings also declined sharply in August. Vacancies decreased by 659,000 from 11.1 million in July to 10.44 in August. This is according to the department’s Job Openings and Labor Turnover Survey (JOLTS).
Federal Reserve officials continuously monitor the JOLTS report for any signs of trouble in the labor market. According to FactSet, the signs are there.
10.44 million jobs are well below the expectations of 10.96 million job openings. openings, according to FactSet.
Enormous Labor Shortage in the US
Meanwhile, Chris Rupkey, Fwdbonds chief economist, concedes the need for more workers as the economy rebounds. “There is an enormous labor shortage in the country right now and it is not just because people are quitting or have child care problems, or can’t get to work due to the Delta variant.
The economy is strong as a bull, that is why there is a tremendous demand for labor,” he said. From a 7% job posting rate in July, the numbers are now 6.6%. Back in 2020, the job posts are 4.4% as the US still had trouble addressing coronavirus.
Even as nonfarm payrolls increased by 366,000, hires decreased by 439,000. As expected, the largest dips came from the leisure and hospitality industries. This pushed the total hire rate from 4.6% down to 4.3%.
Specifically, leisure dropped by 233,000, sending the rate to a tailspin from 9.5% to 7.9% in a month. In addition, government hiring also fell sharply from 2.2% to 1.4% in August.
Federal Reserve Thinking of Pulling the Plug on Pandemic Policies
With the trouble besieging the labor market, Federal Reserve officials are rethinking their strategy. They are currently deliberating on whether it’s time to pull back on the policies that helped during the early months of the pandemic.
The Fed expects to scale back on monthly bond purchases. However, they will only raise interest rates when the labor market stabilizes.
Watch the BNC News video report asking why 4.3 million Americans quit their jobs in August:
Why do you think that American workers are quitting their jobs in retail and foodservice? Is it because they can find new and better-paying jobs? Or is it because they cannot afford to go out to work during the pandemic?
Let us know what you think. Share your comments below.