The U.S. quitting spree is still going strong.
After dipping slightly in May, the share of people leaving their employer rose again in June, when another 3.9 million people quit their jobs, according to the latest Job Openings and Labor Turnover Survey. The numbers come in slightly lower than April figures that showed a record 4 million people quit during that month, sparked by confidence they could find a better job elsewhere.
The number of people who quit their jobs in June make up 69% of total separations, which also includes layoffs, firings and retirement.
Worker confidence ticked up through the spring and summer as vaccination efforts climbed, Covid-19 infection rates leveled off and businesses ramped up hiring in order to meet rising consumer demand in the recovering economy.
In June, industries that saw an uptick in quitters include professional and business services; durable goods manufacturing; and state and local government, excluding education.
Meanwhile, opportunities continue to abound for job-seekers. The number of job openings in the U.S. economy jumped to 10.1 million in June — the highest on record, according to the Labor Department — led by openings in professional and business services; retail trade; and accommodation and food services.
"Labor demand keeps getting stronger. This is the third straight month of record-breaking job openings," writes Nick Bunker, an economist with the jobs site Indeed. "The quits rate is also close to its all-time high, which was set just two months ago in April. This wave of demand will eventually recede, but job-seekers should ride it until then."
Data suggests workers leveraging today's tight labor market are coming out ahead with higher wages. While average wage growth for all workers increased just 1.5% in June compared to a year ago, it's up by 5.8% for job-switchers, according to the latest Workforce Vitality Report from ADP, the payroll company.
Many employers are having to compete for workers by offering attractive signing bonuses, higher pay, better benefits and more accommodating work schedules.
Job-switchers joining employers with at least 500 workers are making even bigger gains: "switchers into large firms are reaping the largest rewards, with pay jumping by nearly 7% for job changers," the ADP report reads.
Additionally, "larger firms are also enjoying lower rates of turnover as they are better able to retain their current workforce. This will take on an increasingly important role as the number of job openings have soared to record highs and firms continue to struggle to find qualified applicants."
The latest jobs report says there are 8.7 million Americans looking for work, meaning there are currently more than 1 million more job openings than people who can fill them.
But unemployment numbers don't capture the millions of people who are misclassified, experienced a pay cut or drop in hours, or had to stop looking for work altogether. For example, limited child-care access during the pandemic has disproportionately caused women to be forced out of work. Workers excluded from official unemployment numbers are disproportionately Black, Hispanic, Asian, low-income, women and those without a college degree.
If all these workers were taken into account, July's unemployment rate would be 8.1% instead of the reported 5.4%, according to Heidi Shierholz, the director of policy at the Economic Policy Institute.
Meanwhile, women who recently quit for a new job are seeing above-average wage growth, ADP data shows — 6.4% wage growth for women versus 5.5% for men. But because of the wage gap, women are starting from a lower average wage level of $27.79, compared to $32.61 for men. Furthermore, women make up a disproportionate share of workers in leisure and hospitality, which is the only industry where wages were lower this year than last year.
While the number of people leaving their current jobs to look for new ones exceeds pre-pandemic levels, lingering pandemic concerns and limited caregiving options remain major barriers to a fuller economic recovery, writes ADP chief economist Nela Richardson.
A resurgence of Covid-19 cases across the country, due to the contagious delta variant, could upend economic recovery from the spring and early summer. Already, employers are having to navigate the CDC's updated indoor masking guidance, a growing body of organizations requiring vaccines and delayed return-to-office plans.
"The jobs market's swings have been head-spinning since the pandemic began, with strong job gains and disappointing losses," Richardson says. "But new concerns about rising infections tied to the delta variant may continue to cause an ebb and flow in the recovery."