The great resignation begins to turn the tide. Here’s why.

When the pandemic first hit, Celeste Lyons quit her job at a Connecticut law firm and began hiding at home, living off retirement savings and an inheritance from her parents as she that she was trying to avoid getting sick. She eventually wanted to work again, but nearly two years passed before Lyons, 63, started a new gig as a property analyst – a position that allows her to work from home when Covid cases spike .

“I got tired of spending my retirement money. I thought, “I need to top up my account,” Lyon says of his decision to return to work. Plus, she adds, during all that time at home, “I just got bored of my skull.”

Lyons is among millions of Americans who have dropped out of the workforce amid the coronavirus pandemic and have spent months wondering if and how to return to work as fears of the virus abound, the child care system The country’s children collapsed and the ad hoc nature of work-from-home policies sparked a nationwide reflection on what kind of work and pay people were willing to accept. Generous federal stimulus and unemployment benefits, at the same time, provided an additional source of income for many.

But with Americans’ fears over the waning coronavirus, schools returning to in-person instruction and dwindling surplus economies, some of the biggest factors fueling what has become known as the Great Resignation are beginning to subside. The result is a small but significant increase in the labor force participation rate over the past six months and a slowdown in the proportion of Americans leaving their jobs – two dynamic economists expect an acceleration as the labor market , like much of American society, is moving towards a post-pandemic normal.

After months of near improvement, the labor force participation rate has risen since the fall and even faster in recent months, rising 0.4 percentage points in the three months to February, when 1.87 million people have re-entered the labor force. That’s triple the 621,000 who returned in the previous three months.

Perhaps the most important official indication that the tides may be changing is the recent release of Labor Department data showing that the percentage of workers who quit their jobs in January had slowed to 2.8%, from 3% in during each of the previous two months.

And that trend likely continued into February as well, according to data from Gusto, a payroll processor that works with more than 200,000 companies and releases monthly “resignations” data faster than the government can. Among workers at Gusto’s cloud platform, the share who quit their jobs slowed 0.6 percentage points between January and February to 3.1%, the data showed, matching the same rate as in February 2020, just before the pandemic hit.

“We’re kind of at this point where resignation is a continuing presence in the economy,” said Luke Pardue, economist at Gusto. Barrons“but his presence probably won’t be much larger in the coming months.”

Much of the country’s improved labor force participation and quit rate will be due to the pandemic itself subsiding, at least for now, reducing Americans’ worries about catching of Covid with her. Three in four Americans say they are ready for the country to open up, according to an Ipsos poll from mid-March, and more than half say they are already back to normal or will do so in the next six months. . And the share of Americans who consider the virus a “serious” local risk has fallen to an all-time high of 17%, polling firm Morning Consult found.

It helps pave the way for Covid-wary Americans like Lyons to return to work as they begin to feel safer on their commute or in the office.

“It feels – at least psychologically – that Omicron was just this breaking point for a lot of people, where it feels like you can’t avoid” the virus, says Nick Bunker, director of the economic research for North America with the job search site Indeed. . “There is this period of re-engagement.”

Schools are also reopening for in-person instruction as the number of Covid cases drops and restrictions are lifted, a change that has allowed more working parents – and especially mothers – to return to school. full time job.

In September, the employment rate for mothers of young children was 3.4 percentage points lower than its pre-pandemic level, while the same rate for younger childless women was 2.3 percentage points lower. lower percentage. But mothers have since returned to work faster than their peers, according to Bunker’s analysis of Labor Department microdata, and their recovery rate is now roughly equal to that of younger childless men and women. . Continued improvement in this country would boost overall participation while signaling that the barriers holding back many Americans back to work are easing.

Accelerating the return is also falling spending on excess savings, which had ballooned during the pandemic but which, for households in the bottom 40% of the income distribution, has likely disappeared, along with the cost of life soars. A Moody’s analysis in January estimated that these households had nearly $350 billion in excess personal savings, but predicted that these would be gone by the end of that month. “The financial pressure to return to work will be strong,” wrote Mark Zandi, chief economist at Moody’s Analytics.

For America’s wealthiest, recent stock market volatility has dealt perhaps the hardest blow, hitting investments and 401(k) accounts while testing the resilience of the new generation of day-traders, who supplemented their income with apps like


Robin Hood
.

The share of retirees returning to work has risen sharply over the past two months, which could indicate that Americans are looking to bolster their retirement savings.

Scott Williams quit his government job working in aviation in Jacksonville, Florida, in February last year, cashing in on $50,000 worth of stock and planning to retire early while he hung out with his kids and played at golf. But within six months, Williams, now 50, found himself tired of the quiet and his former colleagues began asking him to come back. During that time, his stock portfolio “started to go bad, go bad,” he says, and he returned to his job almost exactly a year after he left.

Retirement isn’t all it’s made out to be, Williams says. “It’s nice not having to go to work, but what are you going to do?” »

Perhaps more simply, after a record 48 million Americans quit their jobs last year, the great quitting may be starting to slow because the workers who most wanted to head to the exits have already left. , according to economists. While 29% of workers are actively looking for a new job, according to a Grant Thornton workforce survey to be released in April, that’s down from the 33% who were actively looking for a new job in October.

“Some of the reshuffles are over – people have moved on and found better jobs and better wages,” says Moody’s economist Zandi. “I don’t think they want to move every six months or every year. I think they will settle down.

Write to Megan Cassella at [email protected]

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