January 2022 Had the Tightest Labor Market on Record

The recent JOLTS report underscores how remarkable the current labor market climate is. It is the tightest labor market on record, with nearly 5 million more job openings than unemployed Americans. And the Great Resignation continues, with the number of people quitting their jobs each month remaining above 4 million for eight straight months.

By the numbers, it is the best job seeker’s market, but the most challenging employer’s market on record— particularly for mid-sized businesses, which are seeing 3.8% of their employees quit each month.

Business demand for labor remains intense. Job openings hit record highs in the Midwest and Northeast, and in information, finance & insurance, professional & business services, and other services. The increase in job openings in other services was particularly notable, growing from 362k to 498k. As workers return to the office and travel picks up, the downtown businesses that serve office workers and tourists are picking up as well.

Small businesses are particularly hungry for talent, accounting for almost one in two job openings across the economy (47%). They also seem to have been hardest hit by Omicron, however, seeing the largest increase in layoffs in January from 0.8% to 1.2%.

Today’s report included annual revisions for 2021. The overall picture it paints is one of a labor market which experienced even more churn than previously recognized, with both more hires and quits, but fewer layoffs. Before the pandemic, quits accounted for 50% of all job separations, on average. In 2021, however, they made up 70%—a sign that workers had more job security than usual and were largely the ones calling the shots.