December JOLTS Report Underscores Remarkable Year for U.S. Labor Market
December JOLTS Report Underscores Remarkable Year for U.S. Labor Market
2022 stands out as a record-breaking year in the labor market, according to data released today by the U.S. Bureau of Labor Statistics in the latest Job Openings and Labor Turnover Survey (JOLTS) report for December.
The JOLTS program, started in December of 2000, produces data on demand for labor and employee turnover—that is, hires and job separations of various kinds, some employee-initiated (such as quits and retirements) and others employer-initiated (such as layoffs and firings). It goes beyond topline measures of employment and unemployment, and provides important insight into the underlying dynamics of the job market.
The December report contains some indicators that may surprise followers of labor market news. Despite a large decline in net job gains between 2021 and 2022, for example, U.S. businesses actually conducted more hires in 2022. And despite the prominence of layoff-related stories in news headlines, 2022 was the year in which the smallest number of Americans in over 20 years lost their jobs.
Read more about three new JOLTS records achieved in 2022 below:
1. The Largest Number of Hires in One Year
Businesses hired more than 76 million new employees in 2022, making it the year with the largest number of completed hires on record. That’s despite the fact that the economy added 6.7 million net new jobs in 2021 but ‘only’ 4.5 million in 2022 (still a large number historically, but substantially lower). The slowdown in job growth is easily reconciled with the uptick in hiring when one considers that the vast majority of hiring—over 90%—is done to replace turnover, not expand headcount. Turnover accelerated in 2022.
2. The Largest Number of Quits in One Year
More than 50 million Americans quit their jobs in 2022, compared to 48 million in 2021, and just 40 million and 42 million in pre-pandemic 2018 and 2019, respectively. Although the term “The Great Resignation” was coined in 2021, the phenomenon more closely characterizes 2022. It was not so much marked by people resigning from the labor market, as by people trading old jobs for better new ones. ZipRecruiter’s survey of recently hired workers captures the improvements in wages, benefits, and working conditions that recent job switchers have been able to secure, and can help explain why quits remain unusually high.
3. The Smallest Number of Layoffs & Discharges in One Year
Only 16.8 million U.S. payroll employees lost their jobs in 2022. That’s an extremely low number, historically, and it stands in stark contrast to the dominance of layoff-related stories in news headlines. By comparison 21.8 million workers were laid off or discharged each year in 2018 and 2019, and 41 million were laid off in 2020 when the Covid pandemic hit.
The reason these three records may seem surprising is that topline labor market indicators—such as nonfarm payroll growth, wage growth, and hours worked—all suggested that the labor market was slowing down in 2022. Layoff announcements from major tech and financial companies reinforced that idea. Under the hood, however, the gears of the job market were spinning faster than ever.
