Americans are quitting their jobs in record numbers, and economists say the Great Resignation is likely to keep up well into 2022.
As workers move around, forecasters predict additional jobs will continue to open up in the new year, giving job-switchers even more opportunities to choose from, says Julia Pollak, chief economist with the job-search site ZipRecruiter.
"We've seen substantial job growth in recent months, all taking place without the labor force participation rate changing," Pollak tells CNBC Make It. She says it's "an exciting moment for job seekers who are benefiting from employers offering hiring incentives and reducing their requirements" to fill a sharply rising number of vacancies.
Here are three reasons why Pollak believes workers will continue to have their pick of jobs in 2022, and what it will take for more Americans to rejoin the labor force.
Demand for goods will remain high
Retail sales were higher than expected in October, according to the latest report from the Commerce Department, meaning that Americans are buying a lot of stuff. Businesses are doing what they can to keep pace with consumer demand, especially heading into the holiday season, by hiring workers to produce, transport and sell more goods.
But industries with some of the highest numbers of job openings are experiencing the highest turnover, especially across retail and manufacturing, Pollak says. This kind of labor crunch incentivizes businesses to do everything they can to attract and retain workers through better pay, perks and working conditions.
Overall, the Labor Department reported 10.4 million job openings in September, consistent with previous months, with the largest increases in health care and social assistance; state and local government, excluding education; wholesale trade; and information roles.
Meanwhile, the U.S. labor market added 531,000 new jobs in October led by roles in leisure and hospitality; professional and business services; manufacturing; and transportation and warehousing. And after what economists considered a disappointing summer for job creation, the Bureau of Labor Statistics recently reported it underestimated job growth between June through September by a cumulative 626,000 jobs, The Washington Post reports.
Demand for services is recovering
Covid-19 pushed many in-person events from 2020 into the next year, and this summer's contagious delta variant pushed additional 2021 events into the future. With improved vaccination rates and pandemic conditions in general, Pollak says a bunch of events from the last two years will finally happen in 2022.
That means a sharp rise in vacations, concerts, weddings, conferences and other live events — as well as a need for businesses to staff up for all these occasions.
Corporate leaders are also banking on 2022 to be when more workers return to the office and business operations stabilize to a post-pandemic normal. Even global business travel is expected to jump more than 37% next year to over $1 trillion, according industry forecasts.
As people return to daily public life, the need for workers across sectors like transportation, leisure and hospitality, and other services (which ranges from auto workers to hairstylists to laundry workers) will rise.
Biden spending bills will add more jobs
On Monday, President Joe Biden signed the highly anticipated $1 trillion Infrastructure Investment and Jobs Act into law. The infrastructure bill aims to improve U.S. roads, bridges, and water systems, and includes funding for projects in public transportation and broadband.
Some reports estimate the infrastructure bill will help create 1 million jobs over the next five years, with the most immediate gains in construction.
Notably, Pollak says, there are 5 million fewer people in the labor market today than there were prior to the pandemic. The labor force participation rate, a measure of how many people are working or actively looking for work, has held steady for months at 61.6%, down 1.7 percentage points from pre-pandemic levels.
She expects more Americans will re-enter the labor force in the new year as the unemployment rate inches down and job opportunities abound. And with many people not working due to health concerns over the virus, they may be encouraged by continued vaccination and booster-shot efforts, as well as improving pandemic conditions.
"When it becomes easy to find a job," Pollak says, "it signals to people on the sidelines to have a try at it and feel that they could be successful."
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