The Big Picture: The Great Resignation Is Long Over
One of the few positives to come out of the economy over the past few years has been in the labor market. A high number of job openings relative to workers has led to a shortage. That’s helped to push up wages.
It’s also allowed workers to increase their pay by changing jobs. The rapid voluntary change of jobs in the past few years has been dubbed the Great Resignation. Now, however, the trend is looking well over.
In fact, the data suggested that trend peaked over a year ago. Now, we’re starting to see a more normalized job market. Openings are declining. Workers aren’t voluntarily quitting as rapidly as last year.
This move has helped reduce the lag between wages and wealth that’s been growing from the late 1960s. The result is a rising level of consumer debt. Ever-lower interest rates have helped finance the appearance of wealth too.
Now, with inflation raging, interest rates are going higher to slow the economy. A slowing economy typically comes down to higher unemployment. In short, some of the recent job gains from the Great Resignation will likely get wiped out.
With this trend on the cusp of reversing, everyone across the economic spectrum may be in for a rude awakening. Higher unemployment means lower asset classes in everything from homes to cars, which can have further effects on the economy.