Fewer US workers quitting jobs, stifling wage growth and bargaining power

A key barometer of worker confidence has remained at the lowest levels for the longest stretch in over a decade, underpinning widespread and growing weakness in the current domestic labor market.

The quits rate for all nonfarm jobs, which measures voluntary job separations as a percentage of total employment, has remained at or below 2% for seven straight months, the longest stretch at these lows since 2015. After the Great Recession, the quits rate did not climb above 2% until December 2015.

The rate for quitting jobs most recently peaked at 3% in April 2022 and has fallen almost steadily since, as the supply of jobs and demand for workers have returned closer to balance and companies have slowed hiring.

"The quits rate is a great real-time indicator of how workers feel about the labor market," said Laura Ullrich, director of economic research at Indeed Hiring Lab. "When it is high … it shows that workers are confident enough to voluntarily leave, sometimes without something else lined up. That confidence has waned, and quits now have been quite low for a while."

Quits have moved and stayed low, as the American jobs picture has dimmed. In February, 20.6% of consumers surveyed by The Conference Board said that jobs were "hard to get," the highest level in five years.

Job quitting in the US has edged downward alongside wage growth, which has slowed from a peak 5.9% annual growth in March 2022 to 3.8% in February 2026. Year-over-year wage growth has averaged just over 3.9% over the past 12 months, compared with 4% over the 12 months before that.

"Quits and wages move together for a reason - workers who quit typically do so for better-paying jobs, and high quit rates force employers to raise wages to retain people," Ullrich with Indeed said. "As the quits rate has fallen, the upward wage pressure has eased, and we've seen that play out in the wage data."

When labor demand outpaces supply, employers tend to lure new workers with higher wages and workers have leverage to quit their jobs in exchange for better ones. Worker leverage peaked in spring 2022 and has declined since as bargaining power has shifted from workers to employers, said Aaron Sojourner, a labor economist at the WE Upjohn Institute for Employment Research.

In January, about 1.9 employees quit their jobs for every employee fired or laid off, according to the latest government data. This ratio, which can serve as a measure of labor bargaining power, has recovered since bottoming below 1.6 in October. It remains well below its April 2022 peak, when it was over 3.4 and workers may have had their highest level of leverage on their employers in years.

Quits stabilized about a year ago and wage growth appears to be moderating at modest levels, Sojourner said.

"The labor market faces many headwinds and uncertainties right now, making employers reluctant to hire and compete hard," Sojourner said. "If employer demand for labor continues to weaken — due to some combination of policy and economic uncertainty or AI or reduced exports or whatever — then quits, wage growth, and employment will fall and unemployment rise."

As the US labor market has slowed, hiring has fallen amid changes to tariffs and immigration enforcement, along with growing global economic uncertainty, said Julius Probst, a senior economist at Appcast.

"In this environment, workers are significantly less confident in the job market and therefore quitting less than in a tight market," Probst said.

Quit rates have returned to 2015 levels when the US was still recovering from the Great Recession and unemployment was more than 100 basis points above where it is now.

Quits could stabilize this year near current levels, Probst said, but given the uncertainty brewing from the war with Iran and its potentially historic impact on energy prices and monetary policy, employment growth and hiring could see a significant stretch of decline.

"With global uncertainty as elevated as it is and uncertainty about the oil shock, quits might continue to decline even further instead of stabilizing," Probst said. "This will also put some slight downward pressure on wages."

Where quit levels are heading largely depends on hiring, Ullrich with Indeed said.

"If the labor market softens further, particularly in the white-collar sectors where quits have already fallen the most, we might see them fall further," Ullrich said. "Each additional decline would put further downward pressure on wage growth, but with diminishing effect. The biggest wage impact from falling quits has probably already happened."