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

EconomyNov 12, 2021 04:38PM ET
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© Reuters. FILE PHOTO: A job posting is shown on the window of a retail store looking for seasonal workers at a shopping mall in Carlsbad, California, U.S. November, 9, 2021. REUTERS/Mike Blake

By Lindsay (NYSE:LNN) Dunsmuir

(Reuters) - The number of Americans voluntarily quitting their jobs rose to a record high in September while job openings stayed stubbornly above pre-pandemic levels, a sign that businesses may have to continue to raise wages in order to attract workers.

The Labor Department's monthly Job Openings and Labor Turnover Survey, or JOLTS report, released on Friday, reflects an uneven economy with strong demand grinding against labor and goods shortages, driving overall inflation to its biggest annual gain in 31 years.

Wage inflation shows few signs of abating even as the daily case rate of coronavirus infections ebbs, with employers in almost every industry competing to lure workers and three million fewer people in the labor force compared to pre-pandemic levels.

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.

A separate survey by the University of Michigan, also on Friday, showed consternation among consumers with sentiment on the economy falling to a decade low, with few believing policymakers are taking sufficient steps to tackle inflation.

Quits rose by about 164,000 in September, lifting the total to a record high of 4.4 million. The quits rate is seen as a good measure of labor market confidence as workers leave when they are more secure in their ability to find a new job.

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

"The continued surge in quits points to wage growth of between 4.5%-5.0%, well above rates that would be consistent with inflation falling sustainably back towards the Fed's 2% target," said Michael Pearce, senior U.S. economist at Capital Economics in New York, following the report.

The Federal Reserve has so far resisted calls to take stronger action to combat higher-than-expected inflation, arguing that it remains transitory even if it persists well into next year. The central bank announced at its last meeting that it will begin to taper its massive bond buying program this month, seen as precursor move to raising interest rates from their current level near zero. Investors currently expect a rate liftoff in mid 2022.

Job openings, a measure of labor demand, edged down by 191,000 to 10.4 million on the last day of September. Hiring also remained largely unchanged at 6.5 million in September. The number of job openings was little changed in all four regions with vacancies increasing most in healthcare and social assistance, and state and local government, excluding education.

The government reported last Friday that nonfarm payrolls increased by 531,000 in October after posting gains of 312,000 in September. Job growth has averaged 582,000 per month this year.

(GRAPHIC: JOLTS - https://graphics.reuters.com/USA-STOCKS/myvmnkbdapr/jolts.png)

Labor shortages could persist a while longer even as the Delta wave of COVID-19 infections slide from their mid-September high. All-time high savings fueled by government aid, as well as a strong stock market and record house price gains, look set to continue to provide a short-term buffer as workers weigh up when to re-enter the jobs market. Higher-than-normal early retirements are also playing a role.

That said, there is hope that with infections declining and schools fully reopened for in-person learning, more people will rejoin the labor force once excess savings helped by the generous government aid, some of which has ended, is depleted.

CONSUMER SENTIMENT AT DECADE LOW

Fewer Americans are feeling better about the economics outlook, at least in the short term. U.S. consumer sentiment plunged in early November to the lowest level since November 2011 as surging inflation cut into households' living standards, the University of Michigan's consumer sentiment survey showed. Its index dropped to 66.8 in its preliminary November reading from October's final reading of 71.7. Economists polled by Reuters had forecast a reading of 72.4.

(GRAPHIC: UMich - https://graphics.reuters.com/USA-STOCKS/gkplgdjmdvb/umich.png)

"One-in-four consumers cited inflationary reductions in their living standards in November, with lower income and older consumers voicing the greatest impact," Richard Curtin, the survey's director, said in a statement.

There is a "growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation," he added.

(GRAPHIC: UMich inflation expectations - https://graphics.reuters.com/USA-STOCKS/gkvlgdbrbpb/umich-inflation.png)

Consumers see inflation in the year ahead accelerating at a 4.9% pace, the fastest since 2008, though they continue to expect it to abate over the medium term, with the five-year outlook at 2.9%, the survey showed.

The survey's consumer expectations index fell to 62.8 - the lowest since October 2013 - from 67.9 in October. Its gauge of current conditions slid to 73.2 - the lowest since August 2011 - from 77.7.

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

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Comments (7)
ravi shastri
ravi shastri Nov 13, 2021 1:21AM ET
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Get all the folks into offices! Work from home allows people to hunt for jobs while on job! Once on office see how the quit rate drops!
By designe
Bydesigne Nov 13, 2021 1:21AM ET
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boom, cell device
no spin
no spin Nov 12, 2021 7:08PM ET
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Just wait till all the baby boomers retire due to this vaccine mandate
Andrew Allen
Andrew Allen Nov 12, 2021 7:08PM ET
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not just boomers
By designe
Bydesigne Nov 12, 2021 7:08PM ET
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5 million people decided to retire rather then comeback after the shut down. On another note the labor crunch and skills gap was predicted for awhile now.  From now until 2030 10,000 Baby Boomers each day will hit retirement age. Nearly half of americans polled during a new york fed survey said they will retire before 62. That means the chance of a person over 62 to be working is 50%. That's alot. Yet another poll says the boomers who have already retired are running out of money and fast.
allen chen
allen chen Nov 12, 2021 7:08PM ET
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People will find work when they need money. Right now? Everyone's a Warren Buffet as long as the money is coming in, with meme people throwing free money to burn to the meme baloon going higher and higher until the money runs out.
Javier Escamilla
Javier Escamilla Nov 12, 2021 6:14PM ET
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Meme stocks pay more than retailers xd
allen chen
allen chen Nov 12, 2021 6:14PM ET
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It's so true that it's so hard to see it as a joke but straight on cynicism.
MK MK
MK MK Nov 12, 2021 4:16PM ET
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I do wish greedy yankees bustards repeat of 2008. You deserve this
Empire Destroyer
Empire Destroyer Nov 12, 2021 4:16PM ET
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Man so true, so much this and that yet they the ones buying stocks. I bet those quitting, a chunk of them think they can earn money through trading until they get wiped out and need to go back to a proper job and then moan they can't find a job because they are no longer competitive
no spin
no spin Nov 12, 2021 1:12PM ET
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There's no way I would get on. plane and fly now. so many senior non distracted with social media veteran employees retiring. You couldn't pay me to fly. going to be a dangerous couple of years coming up
Frank Francone
Frank Francone Nov 12, 2021 12:32PM ET
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You can stay at home. Click buy on the first random IPO and you can earn more than working. Bubbles everywhere. Thanks FED
allen chen
allen chen Nov 12, 2021 12:32PM ET
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With Fed as it is now, it's essentially a centrally planned economy, the exaxt opposite of a self-adjusting, self-regulating markeg capitalism. Another moral hazard because the government and Uncle Powel will always pick up the taps.
allen chen
allen chen Nov 12, 2021 12:32PM ET
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So many zombie companies hanging on by rolling over debts with near zero interest rates, and so many meme people belittling everyone and bragging how much they make. The world's gone before with Trump and Covid. But this is getting even crazier. Fed is the government.
Ricardo Diogo
Rcd72 Nov 12, 2021 11:59AM ET
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only FED doesn't see it...FED agenda is not supporting US economy instead they back speculation and financial greed .
allen chen
allen chen Nov 12, 2021 11:59AM ET
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Another institution where the so-called elites run the show, think what's the best, and decide the fate of all, with most benefits going back to the elites, again.
 
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