4.4 Million More Americans Quit Their Jobs in February
JThe February ob openings were at near-record levels, unchanged from the previous month. It is continuing an upward trend Federal Reserve officials view as an inflation driver.
There were 11.3 million available jobs last month, matching January’s figure and just below December’s record of 11.4 million, the Labor Department said Tuesday.
Historically, the American number who left their jobs rose to 4.4 million from 4.3million in January. In November alone, more than 4.5million people left their jobs. This is the largest number in records going back 20 years. Numerous people take advantage of many opportunities to change jobs and often get higher salaries. The majority of people who quit do it to move on to a better job.
Tuesday’s report is separate from the government’s monthly employment report, which in February showed that employers added a robust 678,000 jobs.
The data “shows that the labor market remains torrid,” Stephen Stanley, chief economist at Amherst Pierpont, said in a research note. “In a month when the economy added 678,000 jobs, the number of job openings only went down by 17,000. That speaks to the depth of the bid that employers have for labor.”
Inflation has been exacerbated by the large number of jobs available and the fact that many businesses have increased their wages to retain and attract workers. For every unemployed worker, there was 1.8 open jobs in February. Prior to the pandemics, more people were without work than there were job openings.
With 3.8% unemployment, it is very close to 3.5% pre-pandemic. This was the lowest level in 50 years. Employers must compete with an even smaller workforce because there are several millions fewer people who have been looking for employment or work since the outbreak.
Because of those trends, Federal Reserve Chair Jerome Powell has singled out openings and quits as a key measure of the labor market’s health and a target of the Fed’s interest-rate policies. Powell said the central bank aims to decrease the availability of jobs in order to lower wage rises and reduce inflation.
“If you were just moving down the number of job openings … you would have less upward pressure on wages,” Powell said. “We need to use our tools to move supply and demand back” into alignment.
Employers were desperate for workers and wages rose by 4.5% in 2021. This is the highest rate in over two decades. Businesses have charged higher wages to compensate for the increased labor cost.
The inflation rate rose 7.9% to February, an increase of 4.8% from the previous year and a record for four decades.
The Fed announced earlier this month that it raised its short term interest rate to 0.375% to curb inflation. This year is expected to see more rate increases, with possibly one or two half-point increases.
Powell’s hope is that by reducing job openings and slowing wage gains, the Fed can bring down inflation without causing widespread layoffs and pushing unemployment higher. Economists overall are skeptical, however, that the Fed can achieve such a “soft landing” for the economy. They worry that the Fed’s rate hikes will result in job losses and potentially even a recession.
Here are more must-read stories from TIME