2021: a record year for the American labor market

Today we received the final piece of the 2021 jobs puzzle from the Jobs Report released by the U.S. Bureau of Labor Statistics.

The US economy created 199k jobs in December, and earnings for the previous two months have been revised up by 141k. That brings the total for the year to nearly 6.45 million net new jobs, the highest annual total on record, dating back to 1939.

2021 was also a banner year for US labor markets in other respects. It was the year of the Great Resignation and severe labor shortages. And it also went down in history with the highest monthly quit rate, the most job postings, the lowest state unemployment rates in several states, and the lowest number of unemployed by job offer.

Here’s a look at some of the U.S. labor market records broken in 2021:

1. The greatest number of annual net jobs earned

The US economy created a total of 6.45 million jobs in 2021 – 51% more than the total of nearly 4.3 million created in 1946, just after World War II.

The labor market took 3 years – 36 consecutive months – to add the same number of jobs when the recovery started in late 2010, just after the Great Recession.

2. The greatest number of job offers

Twice in 2021, in October and July, the U.S. economy posted 11 million job vacancies, the highest ever. There are now 50.6% more vacancies than before the pandemic.

3. The lowest ratio of unemployed to job vacancies

In 2021, it was unusually difficult for employers to fill vacant positions. At the end of the year, there were only 6.3 million unemployed for 10.6 million vacancies: a ratio of 0.60. Before the pandemic, there was an average of 2.3 unemployed people per vacant position. That number has generally increased after recessions, but not this time around.

4. The highest dropout rate

2021 has been designated as the year of the Great Resignation or the Great Reallocation. Given the many new opportunities in the economy, American employees have quit their jobs at an all-time high. Remote work opportunities, strong salary growth, better benefits and even the creation of new businesses were the main motivators behind the great wave of quits. The resignation rate hit a record 3% twice in 2021, with 4.5 million employees leaving their jobs in a single month.

5. Lowest unemployment rates in the state

Given the slow recovery in labor market participation, the record number of job openings has led to a sharp drop in the unemployment rate in almost all states. Eight states-Arkansas (3.4%), Georgia (2.8%), Montana (2.8%), Nebraska (1.8%), Oklahoma (2.5%), Utah (2.1%) , West Virginia (4.0%) and Wisconsin (3.0%) – hit new records in November 2021. Nebraska’s current unemployment rate of 1.8% is the lowest of any state on record .

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