2021: A Record-Breaking Year for U.S. Labor Market

Today we received the last piece of the 2021 employment puzzle from the jobs report released by the U.S. Bureau of Labor Statistics.

The U.S. economy added 199k jobs in the month of December, and the prior two months' gains were revised upwards by 141k. This brings the total for the year to almost 6.45M net new jobs-the highest single-year total on record, dating back to 1939.

2021 was a record-breaking year for U.S. labor markets in other regards, too. It was the year of the Great Resignation and severe labor shortages. And it also made history with the highest monthly quits rate, the highest number of job openings, the lowest state unemployment rates in multiple states, and the lowest number of unemployed people per job opening.

Here is an overview of some of the U.S. labor market records shattered in 2021:

1. The highest number of annual net jobs gained

The U.S. economy added a total of 6.45M jobs in 2021-51% more than the almost 4.3M total added in 1946, right after World War II.

The labor market took 3 years-36 straight months-to add the same number of jobs when the recovery started at the end of 2010 right after the Great Recession.

2. The highest number of job openings

Twice in 2021, in October and July, the U.S. economy recorded 11M job openings-the most on record. There are now 50.6% more job openings than before the pandemic.

3. The lowest ratio of unemployed people to job openings

In 2021, it was unusually hard for employers to fill vacancies. By the end of the year, there were just 6.3 million unemployed people for 10.6 million job openings: a ratio of 0.60. Prior to the pandemic, there were generally 2.3 unemployed people per job opening, on average. That number has usually surged after recessions, but not this time.

4. The highest quits rate

2021 has been referred to as the year of the Great Resignation or the Great Reallocation. Given plenty of new opportunities in the economy, U.S. employees quit their jobs at record rates. Remote work opportunities, high wage growth, better benefits, and even the creation of new businesses were the main motivators behind the big wave of resignations. The quits rate hit a record-high 3% twice in 2021, with 4.5 million employees quitting their jobs in a single month.

5. The lowest state unemployment rates

Given the sluggish recovery in labor force participation, record-high job openings caused the unemployment rate to fall briskly in almost every state. 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 record lows in November 2021. Nebraska's current 1.8% unemployment rate is the lowest for any state on record.