December sees significant job growth, but millions of Americans are calling it quits

The U.S. showed strong job gains in December, but a record number of Americans continue to leave the work force voluntarily.

ADP released December’s private sector payroll report Wednesday showing that private sector employment rose by 807,000 jobs from November to December, well above experts’ predictions.

Meanwhile, the Bureau of Labor Statistics reported Tuesday that there are 10.6 million job openings in the U.S. as the “quits rate” rose to 3%.

These quits came amid a rise in federal benefit programs such as the monthly child tax credit, which expired last month.

“Total separations includes quits, layoffs and discharges, and other separations,” BLS said. “Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, disability, and transfers to other locations of the same firm.”

The Biden administration has touted the job growth as the economy rebounding from the downturn in the wake of nationwide COVID-19 lockdowns, but that recovery has been troubled by other economic indicators such as increased inflation and the elevated quit rates.

“The number of quits increased in November to a series high 4.5 million (+370,000)," BLS said. "The quits rate increased to 3.0 percent, matching the series high in September. Quits increased in several industries with the largest increases in accommodation and food services (+159,000); health care and social assistance (+52,000); and transportation, warehousing, and utilities (+33,000). The number of quits increased in the Northeast, South, and Midwest regions.”

According to the ADP report, small businesses with fewer than 50 employees created 204,000 jobs in December while companies with 50-499 workers created 214,000 jobs. Large companies with 500 or more employees added 389,000 jobs.

The report comes ahead of the monthly federal jobs report expected Friday.

"December's job market strengthened as the fallout from the Delta variant faded and Omicron's impact had yet to be seen," said Nela Richardson, chief economist at ADP. "Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth. December's job growth brought the fourth quarter average to 625,000, surpassing the 514,000 average for the year. While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels."

ADP, which has 460,000 U.S. clients with nearly 26 million workers in the U.S, worked with Moody Analytics on the report.

“The report, which is derived from ADP's actual data of those who are on a company's payroll, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis,” the group said.