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US Economic Boom Spurs Competition for Workers

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A Strong Economy Fuels Job Growth, Consumer Confidence & Turnover

Headlines of employee layoffs, corporate downsizing and long unemployment lines are distant memories for most American workers, as doubt and uncertainty have been replaced with optimism and confidence in the job market. Employees have relentlessly seized opportunities available to them in a thriving job market that has recovered from the recession that gripped the nation a decade ago.

The U.S. real gross domestic product, the metric used to measure the health of the economy, grew 2.6% in the fourth quarter of 2017 and showed no real signs of a slowdown. The fourth-quarter results marked 15 quarters of consecutive growth. Positive economic conditions spurred favorable consumer sentiment, or confidence in the economy, which averaged 96.8% for 2017, the highest since 2000.

The rise in confidence is well-founded, as 2017 marked the seventh consecutive year that the economy added more than 2 million jobs (BLS, n.d.b). Job openings and the demand for workers, another indicator of economic health, are expected to increase as the economy continues to expand (Thibaud, 2017).

As job growth soared, the unemployment rate, the percentage of the labor force actively seeking work, plummeted. The unemployment rate settled at a low of 4.1% at the end of 2017, a 17-year low (BLS, n.d.c). The drop in the unemployment rate and the rise in job openings forced employers to recruit already employed workers. This increased the competition for workers and fueled additional employee quits.

The competition for workers is evidenced in the quits rate, which serves as a measure of how many employees quit and employee willingness or ability to leave and find another job (BLS, 2018). In 2017, the voluntarily quits rate increased 5% from the prior year, as nearly 38 million employees left their jobs (BLS, 2018). Since 2009, the number of quits, which excludes retirement and relocation, increased by over 80%, surpassing pre-recession levels (BLS, 2018).

While employee quits increased for the eighth consecutive year, involuntary quits declined for the eighth consecutive year. This resulted in an overall stagnant level of separations (BLS, 2018). As employees increasingly quit their jobs, employers were compelled to keep less desirable workers, versus discharging or replacing those workers, to meet the demands of their businesses.

Workers who have not already quit are predicted to evaluate their opportunities. With a healthy economy, robust confidence, an abundance of jobs and stiff competition, workers are expected to be increasingly selective about where they work and will voluntarily change jobs when a better opportunity is present.

 

References:

  1. Bureau of Labor Statistics. (2018b). Current Employment Statistics. Retrieved from https://www.bls.gov/ces

  2. Bureau of Labor Statistics. (2018c). Laborforce Statistics from the Current Population Survey. Retrieved from https://www.bls.gov/cps/ 

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