The share of workers who quit their jobs jumped in November for the first time since last spring — and they're getting a big pay bump for moving, data shows.
The "quits rate" among U.S. workers was 2.7% in November, up from 2.6% the prior month, according to U.S. Department of Labor data issued Wednesday. It was the first time the rate increased since last March.
The quits rate measures the number of people who quit their jobs during the month as a percent of total employment.
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Almost 4.2 million people left their jobs voluntarily in November, according to Labor Department data. Workers who quit overwhelmingly do so in order to take new jobs, economists said.
The labor market remains strong by historical standards, characterized by a high level of job openings and low layoffs. That translates to ample opportunity for workers, who generally get an increase in pay when they accept a new position.
"Job switching is one of the best ways to get a raise," said Nick Bunker, economic research director at Indeed. "People are quitting their jobs because it pays to quit their job."
In fact, the difference in wage growth for job switchers relative to those who stay in their current role is at a record high, said Julia Pollak, chief economist at ZipRecruiter.
Job switchers got a 7.7% increase in wages in November from a year earlier, versus a 5.5% increase for job stayers, according to the Federal Reserve Bank of Atlanta. That 2.2-point difference is about three times higher than the 0.7-point historical trend, Pollak said.
"There are clearly big benefits to switching jobs right now," Pollak said.
Why this is a 'golden era' for job seekers
Quickly rising pay for the average American is a byproduct of a surge in demand for labor that started in 2021 as large sections of the U.S. economy began to reopen after a period of pandemic-induced dormancy.
Job openings ballooned to record highs. Quits increased in lockstep — a trend that came to be known as the Great Resignation. Layoffs fell to historic lows as businesses sought to hang onto their existing workers.
"This is one of the best times ever for workers and jobseekers," said Pollak, adding that workers have an unprecedented degree of job security and opportunity. "It remains a sort of golden era."
While job openings and the level of quitting have declined from peaks in late 2021 and early 2022, they remain elevated by historic standards. Quits will likely remain high until labor demand takes a serious downturn, Bunker said.
Of course, wage growth hasn't kept pace with inflation for the average worker. So-called "real" hourly wages — a measure of pay after accounting for inflation — declined by 1.9% in November, according to the Labor Department.
In other words, the average consumer lost buying power because rapidly rising prices for goods and services outstripped pay growth.
But job switchers did better at keeping up with inflation than those who stayed at their jobs. In fact, in November, their annual 7.7% wage growth beat the 7.1% annual inflation rate, according to a comparison of Federal Reserve Bank of Atlanta wage data relative to the consumer price index.
Policymakers try to cool job market to tame inflation
Wage growth is feeding into inflation, which has declined but remains near its highest level in about four decades. The U.S. Federal Reserve has been raising interest rates aggressively in a bid to reduce demand in the economy, cool the labor market and snuff out stubbornly high inflation.
Wage growth has moderated a bit from 2021, though remains strong relative to its pre-pandemic trend, Bunker said. If wages continue to increase at rapid rates, policymakers may feel the need to raise borrowing costs even more than anticipated — cooling the labor market further in the process.
Currently, the brakes don't seem to be slamming on the labor market, at least not in the near future.
"The labor market is the bedrock source of strength for the U.S. economy right now," Bunker said.
Some economists recommend workers prepare in case a downturn eventually comes, and increased layoffs with it.
"Even for those who believe their employment is stable, it would be wise to keep job contacts intact in case things change over the course of the year," said Mark Hamrick, senior economic analyst at Bankrate.