The U.S. Job Market Has Shifted from “Great Resignation” to “Great Stay”
The US job market has undergone a dramatic transformation in recent years, transitioning from a period of record employee turnover to a period with little churn. The “great resignation” of 2021 and 2022 has given way to the “great stay”, a job market characterized by low levels of hiring, quits, and layoffs.
During the pandemic, employers struggled to hire and retain workers, resulting in record numbers of job openings and unemployment rates falling to their lowest point since the 1960s. Over 50 million workers quit their jobs in 2022, attracted by better job opportunities elsewhere. However, the labor market has since cooled, with the quits rate falling below pre-pandemic levels and hiring rates dropping to their lowest since 2013.
Economists attribute the “great stay” to two main factors: employer “scarring” and the Federal Reserve’s interest rate hikes. Businesses are hesitant to lay off workers after struggling to hire and retain staff, and the reduced job openings have reduced the number of quits, which is a barometer of worker confidence in finding a new job. Additionally, the interest rate hikes have made it more expensive for businesses to borrow, leading them to pull back on expansion and new ventures, and subsequently reduce hiring.
The “great stay” means that Americans with a job now have unprecedented job security. However, those looking for a job, including new college graduates and workers dissatisfied with their current role, will likely face a tough job search. To increase their chances, job seekers should consider widening their search and developing new skills.