U.S. workers quitting reaches record high, job openings edge down in
September
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[November 13, 2021] By
Lindsay 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.
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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
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.
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.
"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.
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.
(Reporting by Lindsay Dunsmuir and Dan Burns; Editing by Andrea Ricci)
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