May 31, 2023 - Economy

The Great Resignation is over, quit rates return to pre-pandemic levels

Data: U.S. Labor Department; Chart: Axios Visuals
Data: U.S. Labor Department; Chart: Axios Visuals

A phenomenon that defined the pandemic-era labor market is over: the Great Resignation — workers furiously quitting for new, likely higher paying jobs — is a thing of the past.

Why it matters: The historic surge of quitters was a symptom of an on-fire labor market, where demand for workers far outstripped supply of them.

  • Now the job market may be entering a different era — one that more closely resembles pre-pandemic times.

By the numbers: The quits rate fell to 2.4% in April, according to the Job Openings and Labor Turnover Survey, released this morning.

  • That is just a tick (0.1 percentage point) higher than the quits rate in February 2020 — and roughly in line with the average quits rate in 2019.
  • Even leisure and hospitality workers, once the poster child for the quits boom, are returning to pre-pandemic norms: the quits rate in this segment hit 4.6% in April — very close to the January 2020 rate of 4.4%, and well-below the peak 5.8% recorded last summer.

What they’re saying: “We are pretty much back to a strong, robust labor market, but one that is no longer overheating,” says Julia Pollak, an economist at ZipRecruiter.

  • “One that isn't plagued by widespread labor shortages that are wreaking havoc across the economy, and causing firms to offer off-cycle wage increases and dispense of all hiring requirements. The deck isn't totally stacked in jobseekers‘ favor anymore.”

Flashback: At the height of the Great Resignation, the overall quits rate most recently peaked at 3% in April 2022, when there were roughly 4.5 million quits in a single month.

  • Turnover of that magnitude had never been seen before — at least not since the Labor Department started collecting the data in 2000.
  • Workers were in such high demand that they felt confident enough to ditch current gigs for new (likely higher paying) ones.

The bottom line: Americans who did job hop over the past few years have seen heftier pay gains. But that phenomenon, too, is fading — another sign of some heat coming off the labor market.

  • Job-changers saw annual pay grow more than 13% in April, according to payroll professor ADP — more than double the annual rate of job-stayers.
  • Still that was the slowest pace of growth since November 2021.
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