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A record 4.5mn US workers quit the labour force in March, while the number of job openings hit a new high of 11.5mn, underscoring employers’ struggles to fill positions as inflation ripples through the economy.
Government data released on Tuesday showed the “Great Resignation” was continuing to gain momentum as the US recovers from the coronavirus pandemic, giving workers additional leverage with businesses.
The rising number of job openings and voluntary resignations have forced companies desperate for employees to raise wages and sweeten incentives to lure workers away from their old jobs — which, in turn, has encouraged even more employees to quit their current posts.
The figures for both job openings and workers quitting were the highest since the US labour department began collecting the data in December 2000.
“Despite job openings seemingly plateauing for the last few months, the new record high indicates demand for workers is clearly still red hot,” said Daniel Zhao, an economist at jobs site Glassdoor.
The jobs picture continues to be coloured by Americans who have not re-entered the labour force because of lingering Covid-19 fears and difficulties finding childcare. In March, there were 1.9 jobs available for each unemployed worker, far above the pre-pandemic ratio of 1.2, in February 2020.
Retailers drove the surge in job openings, posting some 155,000 new positions in March. Workers in low-wage sectors have been the biggest beneficiaries of the tight labour market, economists say, and have had the most opportunities to switch jobs.
Business leaders have lobbied to loosen immigration restrictions to combat labour shortages after pandemic travel rules reduced arrivals of both highly skilled and blue-collar workers.
Federal immigration officials on Tuesday announced an automatic 1.5-year extension to expiring or expired work permits for immigrant workers. The extension will go into effect on Wednesday.
“Despite concerns about an imminent recession, employers are still looking to hire at near historic rates and are desperately holding on to the workers they have,” said Nick Bunker, an economist at jobs site Indeed. “The labour market is still very much a jobseeker’s market. Something dramatic will have to happen for this to change anytime soon.”
The tight labour market, alongside surging petrol and food prices, have contributed to the highest US inflation in four decades. Businesses including Starbucks and Chipotle have attributed their own price increases to rising labour costs.
The Federal Reserve is expected to continue its aggressive tightening of monetary policy in an effort to stem inflation. After delivering its first interest rate increase since 2018 in March, the Fed is expected to issue an aggressive half-percentage point rise at its meeting this week.
On Friday, the labour department is scheduled to issue a monthly payrolls report. Economists surveyed by Reuters expect the data to show a US unemployment rate of 3.5 per cent, returning to levels reported before the onset of the pandemic in 2020.
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