Fewer Americans quitting jobs as market begins a cool off

The United States job market has remained solid in the years after the pandemic. Mostly that was thanks to a hiring boom, after millions lost their jobs because their company either could not survive the shutdowns or were told to get vaccinated or be fired. But the boom party is over, and things are beginning to settle back to normal, and it is bringing about new problems.

A study from the Wall Street Journal shows that fewer Americans are leaving their current jobs because jumping to a new ship is becoming rare. It has now left people stuck in a valley where they cannot be promoted, because others are not quitting, and they cannot find a better job because the competition is stronger.

Matt Grossman of the WSJ says that the cracks are beginning to form in the job market foundation.

"Things are a lot less dynamic...people are not getting laid off at a high rate, but if you do not have a job, it is getting very hard to find one," he says.

In all, Americans quit about 39 million jobs in 2024, which is down 11 percent from 2023, and 22 percent down from the peak in 2022. There are more decreases expected in the coming year as well.

The status of the economy, and the job market, has left people feeling uneasy, and uncertain about where to go. If they do quit, they risk finding a lower tier job with less pay. If they stay, they also get stuck in the same position, as older employees ahead of them refuse to retire.

There is also much stiffer competition for the higher paying, more prestigious jobs.

"You are starting to see that a bit in numbers like the unemployment rate, which has recently moved up to 4.1 percent after being in the mid three percent range," says Grossman.

Many employers, especially as the economy has tightened up the last few years, have made big cuts, or just installed hiring freezes to save money where they can. That might lead to the next big problem down the road in 2025.

"The concern economists have is that if companies are cutting back, and have done that by holding back hiring...does that mean as some point this year, they will have to go a step farther, and start laying people off," he says.

It will all depend on how well companies are at managing their money. If they are smart, and cut out useless things like DEI initiatives, then we could see the job market stabilize. If they continue being irresponsible, then we might see the job market take a bit of a tumble in 2025.