The number of people quitting their job in the US rose year-over-year by 1.1 million to 4.4 million in September.
The hardest hit sectors in absolute numbers were accommodation and food services with 863,000 resignations, professional services with 706,000 resignations, retail trade with 685,000 resignations and health care and social assistance with 589,000 resignations.
The highest resignation rate was in accommodation and food services with 6.6%, followed by arts, entertainment and recreation with 5.7% and retail trade with 4.4%.
The combination of tight labor markets and record inflation has led to fears of a wage-price spiral in which higher wages lead firms to increase prices on goods and services which in turn lead to demands for higher wages.
According to the Kansas City Federal Reserve’s Labor Market Conditions Indicators recent inflation is not due to a tight labor market.
“Tighter labor markets induce firms to raise wages to attract workers, but they do not pass the higher costs to customers (as measured by PCE inflation) in an improving economy,” noted the reserve bank in an October report. “Because LMCI momentum has been positive throughout 2021, the excess PCE inflation observed cannot be accounted for by labor market activity.”