Americans quit at record pace as world economic growth expected to slow

On the same day the Labor Department reported a record number of Americans quitting their jobs in August, the International Monetary Fund (IMF) downgraded its expectations for economic growth in the United States and around the world. In its job openings and labor turnover report published Tuesday, the Labor Department said 4.3 million Americans quit their job in August. That’s the highest number of quits in a month since the department started tracking in December 2000.

The report also shows hiring slowed in August, and the number of jobs available fell about 700,000 from a record high of 11.1 million in July. It comes just days after the Labor Department reported its second of two straight disappointing jobs reports.

An ongoing puzzle for economists has been trying to explain how hiring can be so slow with a record number of jobs available. In the past year, open jobs have increased 62 percent. However, according to Tuesday’s report, overall hiring has actually declined over that same period of time. The record number of Americans quitting in August could imply there’s still a fear among potential workers of the Delta variant, and that fear could keep people from looking for or taking jobs.

Meanwhile, the IMF released its latest World Economic Outlook and its Global Financial Stability Report Tuesday. In the former, the IMF dropped its worldwide growth prediction for 2021 from 6 percent in July to 5.9 percent Tuesday. The fund’s prediction for the U.S. dropped a whole percent from July to Tuesday, from 7 percent to 6 percent.

“One of the major risks remains that there could be new variants of the virus that could further slow back the recovery,” IMF economic counsellor Gita Gopinath said. “We’re seeing major supply disruptions around the world that are also feeding inflationary pressures, which are quite high, and financial risk-taking also is increasing, which poses an additional risk to the outlook.”

As for the stability report, the IMF said COVID-19’s lingering impact is fading optimism among investors, which could lead to financial tightening in the medium term. “Investors are increasingly worried about the economic outlook amid great uncertainty about the strength of the recovery,” IMF Monetary and Capital Markets Department Director Tobias Adrian said. “Policymakers are now confronted with a difficult tradeoff. They must continue to provide near-term support to the global economy, yet they must simultaneously try to avoid the buildup of medium-term financial stability risks.”