Worker Retention
As job growth has slowed, quits rates have declined but remain above pre-Covid.
Quits rate by industry, U.S.
Dec 2000 - May 2023
Source: Bureau of Labor Statistics. Notes: The quits rate is the number of quits during the entire month as a percent of total employment. Quits include employees who left voluntarily, except retirements or transfers to other locations. Data is seasonally adjusted. May 2023 data is preliminary.
Buoyed by a tight labor market, 48 million American workers quit their jobs over the last 12 months in search of better wages and working conditions. In May alone, 4 million workers quit jobs. The overall quits rate has stabilized at an elevated 2.6%. The quits rate is highest in the leisure and hospitality sector (where wages are typically low) at 4.8% in May, but is down from its peak of 5.8% in July 2021.
The Federal Reserve’s efforts to tame inflation by raising interest rates is aimed at reducing employment growth and increasing unemployment to bring down wage levels.1 These efforts may be having some effect as job growth may be slowing (Total jobs). Meanwhile, the 12-month inflation rate has decreased steadily down to 3% in June 2023.2 However, when unemployment increases, low-wage workers historically have borne the brunt of job losses.
“Federal Funds Effective Rate”. FRED. https://fred.stlouisfed.org/series/FEDFUNDS
“12-month percentage change, Consumer Price Index, selected categories”. U.S. Bureau of Labor Statistics. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
