People Quitting Jobs Less, But Rate Still Well Above Pre-Pandemic Level

The number of Americans who quit their jobs went down in January, though the 4.25 million figure was still 23 percent higher than levels before the pandemic.

The vast majority of those who are quitting their jobs in the U.S. are leaving for new roles as employers offer benefits like higher pay, according to a Labor Department report issued Wednesday.

Meanwhile, the 11.3 million jobs posted at the end of January neared record highs, but were slightly down from December's 11.4 million record count, the Labor Department said.

The Biden administration has touted job growth as an indicator of economic recovery, but Wednesday's report shows that the job market is still weathering the effects of the COVID-19 pandemic.

While tens of millions of hires were recorded in the year ending in January 2022, the number of people leaving jobs has kept pace with most of those gains. With 76.4 million hires in that time period and 70 million jobs "separations," the net employment gain was 6.4 million, according to the report.

Job Quit Rates Down
The number of Americans who quit their jobs went down in January, though the 4.25 million figure was still 23 percent higher than levels before the pandemic. Above, employers manned booths with banners promoting their companies' benefits in order to entice job applicants to approach their booths during the Lee County Area Job Fair in Tupelo, Mississippi, on October 12, 2021. Rogelio V. Solis/AP Photo

In a statement to Newsweek, a White House official noted that the data on people leaving jobs doesn't mean that they're leaving the workforce altogether. An economy in which employers compete for hires with better pay and benefits "is the kind of economy the President has set out to achieve since his first day in office," the official said.

"President Biden's goal is to get more Americans back to work – in better jobs and with higher wages. Looking at the economy as a whole, that's exactly what we're seeing in record numbers. Americans are seeking out and getting better jobs, wages are up, unemployment is down, and the share of Americans in the labor force continues to rise," the official said.

Since Russia's attack on Ukraine began at the end of February, the January numbers do not highlight any potential effects of the invasion.

The high numbers of job openings and quits have bolstered a cause-and-effect chain in the job market and consumer prices.

With the current worker shortage, there are 1.7 jobs available for every unemployed worker, the Associated Press reported. The lack of workers has spurred complaints about worker shortages, leading businesses to offer incentives like higher pay to draw in workers who have more job opportunities than ever.

As a result, the average hourly pay for U.S. workers has been on the rise. Hourly wages increased 5.1 percent last month compared to the previous year, according to an earlier Labor Department report. But the pay gains have also spurred some businesses to raise prices to account for the difference, contributing to the already rising prices in the U.S. and lessening the impact of the increased wages.

The restaurant industry, for example, has seen a rise in prices in conjunction with worker pay increases.

Meanwhile, some companies that don't have enough workers will find themselves forced to turn down work or, for trucking and logistics firms, in particular, unable to meet shipment demands, the AP reported. This can add additional woes to the existing supply chain issues, which can also impact inflation.

Inflation increased at its fastest year-over-year rate in January in 40 years, but the upcoming February inflation report is expected to surpass the previous month. Data provided by FactSet indicates that consumer prices jumped 7.9 percent compared to a year ago.

That would be even higher than the 7.5 percent increase in January and would become the biggest jump in four decades.

Update 03/09/22, 5:15 p.m. ET: This story was updated with comments from a White House official.

Update 03/09/22, 12:45 p.m. ET: This story was updated with additional information and background.