Job Openings, Quits Remained Elevated at End of Last Year

The Labor Department on Tuesday separately released a December snapshot of hiring and departure trends that showed demand for workers and turnover remained historically high at the end of the year. There were 10.9 million job openings in December, the department said, up slightly from 10.8 million the prior month.

The number of times workers quit fell to 4.3 million in December, from a record 4.5 million the prior month. Hiring also eased that month to 6.3 million, down by 333,000 from November.

The government figures lag behind private-sector data by about a month.

Job openings surged in early 2021 from just over seven million in January to as high as 11 million last summer and fall as the number of positions exceeded available workers in a labor-force that remained smaller than it was before the pandemic.

Demand was still historically high in January, with the slowdown primarily due to the Omicron wave, said Nick Bunker, an economist at Indeed.

“Overall, demand for workers is still quite strong, but some sectors might have just pulled back on their hiring plans because there has been a corresponding pullback in consumer demand for those services,” Mr. Bunker said. He added that businesses offering in-person services were more affected by the Omicron variant.

Several readings of economic activity at the end of last year showed early signs of a slowdown in growth for the U.S. economy, which rebounded in 2021 as vaccinations spread, government stimulus was distributed and the economy more fully reopened. Hiring growth slowed late last year and consumer spending, a key gauge of economic activity, fell in December. Manufacturing output also dropped. And inflation hit a nearly four-decade high.

Mr. Bunker said the Omicron wave didn’t hit the labor market until January when millions of workers called in sick during a record number of Covid-19 cases.

The U.S. labor market has been exceptionally tight, allowing workers to quit jobs at record levels and win bigger pay.

“For the most part, people are staying in the same sector,” said Elise Gould, senior economist at the left-leaning Economic Policy Institute. “People are just taking different jobs in that same sector because they’re looking for better wages, better working hours, paid sick days or for flexibility.”

Josiah Kuha said he worked in information technology for 10 months at a midsize Cincinnati company right after completing a coding boot-camp program, then in August 2021 took a different IT job with Total Quality Logistics, a larger company.

Mr. Kuha said he made the switch because he wanted higher pay, the flexibility of hybrid work and a better workplace culture. He also wanted to remain in IT.

“I am relatively picky about jobs, and I was just wanting some place that would actually be meaningful to me,” Mr. Kuha said. “IT is a great field to be in, if you find the right place.”

The higher rate of job switching has been a challenge for employers trying to retain existing workers, recruit new ones and meet consumer demand.

Ruby Bugarin, co-owner of Pepe’s and Margaritas, two Mexican restaurants in the Los Angeles area, said she has been so understaffed that the same three cooks continue to work overtime.

“It’s just really hard to find cooks right now,” Ms. Bugarin said. “If you add up all the overtime hours I’ve paid, it would equal about one to two positions.”

Ms. Bugarin said turnover has been a challenge, with dishwashers and hosts quitting, and workers calling in sick—on top of rising supply costs.

“Every week, it seems like there’s something else popping up,” she said.

Write to Bryan Mena at [email protected]