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Fewer Americans Are Quitting Their Jobs
The U.S. job market remains stable, but job switching has decreased as opportunities for better positions have become less common. According to a U.S. Department of Labor report, nearly 40 million Americans quit their jobs in 2024, down 11 percent from 2023 and 22 percent from 2022. Monthly resignation rates have fallen below pre-pandemic levels, and some economists predict even further declines.
The labor market experienced significant post-pandemic activity, with workers seeking better pay, perks, and flexibility. Businesses consented due to the demand for workers as the economy reopened, though rates diminished by mid-2024. Unemployment rates remain relatively low, with newly created jobs and limited layoffs. Economists anticipate continued job growth and a steady unemployment rate in early 2025.
Hiring rates have also declined, with the share of workers hired into new jobs falling to an average of 3.5 percent in 2024, down from a recent peak of about 4.4 percent in 2021. Companies are focusing on managing salary costs, including planning layoffs and investing in automation to reduce the number of staff.
Approximately 66 million Americans were hired in 2024, compared to 71 million in 2023. According to a Conference Board survey, fewer people report finding available jobs, and more report that jobs are more difficult to obtain.
Companies in tech, law, and related industries, which expanded quickly a few years ago, presently need less new employees. In contrast, hands-on industries, such as healthcare and hospitality, continue to have numerous job opportunities.
Korn Ferry, a professional search business, reports a “steady malaise” in top-level white-collar jobs in the past two years, but anticipates a potential improvement in 2025, depending on presidential administration policies and Federal Reserve monetary policy decisions.
The Federal Reserve is attempting to control inflation through high interest rates to deter investment and hiring rates that can increase wages and consumer prices. With inflation rates slightly above target, the Federal Reserve paused further rate cuts last week, and traders anticipate that rates may not decrease again until June.
A decline in talent competition has companies managing salary costs more closely. Meta Platforms plans to cut 5 percent of its business workforce in February, though it continues hiring technical staff. Defense contractor RTX (formerly Raytheon) is investing in automation to enhance productivity without increasing the number of employees.
The future of the U.S. workforce will depend on how effectively companies manage costs without widespread layoffs. According to the Burning Glass Institute, the labor market could gradually cool without major disruptions.
Herold Law, P.A. is a full-service law firm located in Warren, New Jersey. To learn more about our legal services or to schedule an initial consultation, call 908-679-5011 or visit us online. We proudly serve clients in Warren, Somerville, Morristown, and across New Jersey.
