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The U.S. job market has undergone a dramatic transformation in recent years, from record levels of employee turnover to virtually no attrition.
In short, the “Great Resignation” of 2021 and 2022 has evolved into what some labor economists call the “Great Retention,” a job market with lower levels of hiring, resignations, and layoffs.
“The turmoil in the labor market during the pandemic is increasingly in the spotlight,” said Julia Pollak, chief economist at ZipRecruiter.
How the job market has changed
As the U.S. economy reopens from the coronavirus-induced downturn, employers are scrambling to recruit. Job vacancies rose to historical levels, unemployment reached its lowest level since the late 1960s salary growth As companies compete for talent, they are growing at the fastest pace in decades.
More than 50 million workers quit their jobs in 2022, attracted by better and more plentiful employment opportunities elsewhere, breaking a record set the year before.
However, the labor market has gradually cooled.
this Quit smoking rate “After the frenzied peak in 2022, the levels are lower than before the pandemic began,” said Allison Shrivastava, an economist at job site Indeed.
recruit has slowed to its lowest level since 2013 (excluding the early days of the pandemic). However, layoffs Still low by historical standards.
Shrivastava said this dynamic – more people staying in their jobs amid layoffs and lower unemployment – “suggests that employers are retaining their workforce while also having more of employees remain in their current jobs.”
Great reasons for a great stay
ZipRecruiter’s Pollak said employer “scars” are a major driver of so-called good stays.
Companies that struggled to recruit and retain employees a few years ago are now reluctant to lay off workers.
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But fewer job openings have led to fewer resignations, a barometer of workers’ confidence in finding new jobs. Pollak said much of this dynamic is attributable to another factor: the Federal Reserve’s plans to raise interest rates between early 2022 and mid-2023 to curb high inflation.
Borrowing costs have become more expensive, causing companies to scale back expansion and new business, which in turn reduces hiring, she said. The Fed began cutting interest rates in September but said after the latest rate cut on Wednesday that the pace of cuts would be slower than previously expected.
Indeed’s Shrivastava said that overall, dynamics showed “the labor market is stabilizing, although still reeling from lessons from recent shocks.”
Pollack said good residency means working Americans have “unprecedented job security.”
But those looking for work — including recent college graduates and workers dissatisfied with their current positions — may have a hard time finding work, Pollack said. She suggested they expand their search and maybe try learning new skills.
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