The U.S. job market is still solid. But more workers are staying put, because the chance to trade up to a better job is rarer.
Americans quit 39.6 million jobs in 2024, down 11% from the year before and down 22% from a recent peak in 2022, according to Labor Department data published Tuesday. The share of employees who quit their jobs each month has fallen below the prepandemic level, and some economists expect more decreases ahead.
Unemployment remains modest and the economy is still creating jobs. Layoffs are limited. The Labor Department will release its latest monthly jobs report on Friday, and economists expect another month of decent job growth and a steady unemployment rate at 4.1%.
But there are now just 1.1 job openings per unemployed worker, down from a high of 2 in March 2022. For workers who do get laid off or who want a new role, the path to an offer is far more challenging.
“It’s not immediately clear to me what’s going to turn this around,” said Neil Dutta, an economist at research firm Renaissance Macro.
Workers in well-paid office jobs are encountering an especially challenging job market. Companies in tech, law and related industries hired fast a few years ago, and many now have less need for new employees. There are still plenty of jobs in hands-on industries such as healthcare and hospitality.
“The past 18 to 24 months have been just more of a steady malaise” for top-level white-collar jobs, said Michael Distefano, chief executive of Korn Ferry’s professional-search business. He said the office-job market has shown signs of picking up in 2025, but it will depend on whether Trump administration policies encourage business investment, and how the Federal Reserve sets monetary policy.
The Fed’s quest to tame inflation through high interest rates works in part by discouraging too much investment and hiring, because a hot job market can in turn lift wages and raise prices. The Fed paused further rate cuts last week with inflation still modestly above target, and traders are betting that the central bank might not bring rates lower again until June.
As the race for talent has cooled, companies are more focused on controlling salary costs.
Meta plans to cut 5% of its workforce this month. Its finance chief, Susan Li, told analysts last week that while the tech giant is still adding technical talent, it has eased off hiring business staff. RTX, the defense contractor formerly known as Raytheon, is investing in automation “that will continue to drive productivity without the need to add head count,” its CEO, Christopher Calio, said on the company’s earnings call last week.
What happens next depends on how well companies can keep a lid on costs without turning to layoffs—which have stayed at a low level after spiking early in the pandemic.
“This labor market has shown that it can keep cooling for a long time without things breaking,” said Guy Berger, an economist at the Burning Glass Institute, an employment think tank. “Forever? Probably not, but maybe there’s more room for the labor market to cool in a mostly painless way.”