Is the 'Great Resignation' officially over?

Recent trends suggest that the "Great Resignation" may be slowing as workers increasingly opt to remain in their current positions. Thomas Simons, Jeffries senior U.S. economist joins Market Domination to discuss this shift in the job market and the chart he shared for volume 3 of the Yahoo Finance Chartbook.

Simons explains that the Great Resignation was characterized by workers feeling "extremely confident" about their ability to find new employment, often resulting in "a huge increase in pay for most of them." However, he notes that starting in 2022, there was a decline in both gross hiring and voluntary job departures. Additionally, businesses significantly reduced their spending on HR resources for recruitment and training.

"Obviously if you didn't switch jobs during this period of time, it kind of feels like maybe you missed the boat a little bit," Simons told Yahoo Finance. "But I think the dynamic that the people who switched jobs are going to get raises, that hasn't gone away."

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This post was written by Angel Smith

Video Transcript

That great resignation is no more.

If the latest jolts data is any indication workers are increasingly staying put in their roles.

And that could be great news for productivity.

Thomas Simons, senior us economist Jeffries shared this chart with the Yahoo finance chart book team on that very topic and Thomas joins us now.

So Thomas great to have you.

Thank you.

So walk us through this chart.

Thomas.

So what, what's the bigger broader trend?

Uh It's pointing us to.

So like you said, great resignation was this phenomenon that we saw in the labor market where people felt extremely confident about being able to find a job in some cases, maybe you've been holding down two full time jobs at once while working from home.

Um And that led to this huge increase in pay for most of them, right?

Ad P uh splits out people who switch jobs versus those who stay in their jobs.

Uh for this pay insight data that they have and the year over year gain for job switchers was roughly double what it was for job stayers when it hit the peak.

And what have we seen since like the beginning of 2022 is that you have more, fewer people quitting, um, and also less gross hiring.

Right.

So, uh, that means people are staying in their jobs longer.

It probably means that the teams that they work on are becoming more cohesive, they're gaining more skills are getting better at those jobs.

And most importantly, it's not just people staying there and getting better, but also business is not having to spend nearly as much money in human resources trying to do headhunting exercises and then, you know, have the people leave three months after they've had just, you know, switched into this, this new job.

Yeah, guys, if we can, if we can pull that chart back up and then we have also a pay bumps for people who switch jobs.

So first let, let's uh talk about this.

This is the, this is the chart you were just talking about.

So in other words, we've come back down pretty much to pre pandemic levels in terms of the number of hires and the number of separations combine that with another chart from the chart book which shows pay bumps for job hoppers.

That was of course a big theme right over the past couple of years, if you switch jobs that you would get a big increase and that is has been decreasing, we've seen that trend.

So combine those two things.

What does that imply?

Not?

I mean, I I guess it implies good things.

For inflation.

If you're an individual and you wanna make more money, maybe it doesn't imply not.

No, it's not the best.

Um You know, and so obviously, if you didn't switch jobs during this period of time, it kind of feels like maybe you missed the boat a little bit.

Right.

Um But I think that the dynamic where people who switch jobs are going to get raises, that hasn't gone away.

Right.

And to your point with the turnover, it has just kind of fallen right back to sort of where it was in 2019, which, you know, was pretty decent labor market back then too.

You know, the unemployment rate was very low heading into COVID.

So I do think that that chart, the turnover chart shows some more momentum to the downside that it's gonna continue to, um, you know, sort of show that it wasn't so much, a lot of people quitting their job because of some sort of big shift, but rather people's job changes were pulled forward, right?

Like, maybe I wasn't gonna stay in this job but, or maybe I was gonna stay in this job for a little while longer.

It's just that when everybody started doing it at once, it started making people get off the, off the, the sidelines a little bit faster for that.

So, uh yeah, I mean, it is good for inflation which uh that is good for everybody that inflation goes down, especially lower income folks.

But, um, you know, it, it, it does if we're not yet at the point where the labor market is weakening to the point where we're really concerned about very subdued wages overall.

And then you gotta get into a place I wanna go, Thomas, which is your overall look on the labor market because, I mean, listen, there's signs it's cooling, some economists don't seem concerned about that.

Others though I know are looking at the unemployment rate and the, the tick up it's made and that does worry them.

I mean, where are you at?

So I think I'm more in the former camp.

Uh, I'm not particularly worried about, uh, the labor market as it stands now.

Uh, one of the things that gives me confidence is corporate profit margins have still been quite healthy.

They've come down a little bit, but they've also gone through recent periods where they've gone down and then gone back up too.

I mean, just profitable companies are gonna keep hiring or at, at the very worst.

They're just not gonna be looking for cost cutting that is gonna be letting massive amounts of people go.

Right.

There's always sort of a, you know, culling of the herd or, you know, some sort of refresh that goes on, excuse me, with, with bigger businesses.

But, uh, there isn't evidence to me just yet that there's this big push that's gonna be looking for cost cutting that way.

Um, we've been watching the jobless claims numbers a little more carefully as well.

Continuing claims have been creeping up.

But I know you flagged, um, sort of a, a technical thing that we gotta keep an eye out for in those claims numbers, which has to do with Hurricane Beryl.

Yes, that's right.

Um, so we had the specific issue is that the claims data that we got last week was for the reference week for the BLS Establishment survey.

And it was a week when there was millions of people or over a million people, I should say in the Greater Houston area uh without power, right.

So if those people were, uh you know, if they have a job where they get paid weekly and their business was closed all week or something like that, then they're not getting paid.

There's no response on the, on the payroll as far as the BLS is concerned, the, the business will have zero employees.

Now, they've actually done studies on this in the past and, and went through hurricane Irma Harvey, these other storms in 2017, 2018, 2019.

Um in order to try to actually model what they should do with COVID when businesses were closed and they've improved their processes.

So it's possible that this ends up kind of being a non factor.

But last week, when you look at the preliminary state level data, you did see Texas had about a 12 to 13 K increase and you can say.

All right.

Well, that's, you know, roughly 25% of the increase that we saw during hurricane Harvey.

But again, the timing is the issue, there was only about a 10-K increase in claims in Florida af after hurricane Irma in 2017.

And those state payrolls fell about 100 and 50,000 that month.

So that actually caused the headline print to be negative.

All right, Thomas, thank you so much for joining us today.

I appreciate it.

And those charts appreciate it.