As fewer Americans quit their jobs, experts said Newsweek how this could give Republican front-runner former President Donald Trump a slight advantage as he approaches the November election.
Resignation rates were at their lowest level in August since June 2020, according to the Bureau of Labor Statistics. The withdrawal rate reached 1.9 percent in August, down from July’s levels of 2 percent. So while 3.1 million Americans quit their jobs in August, that was down significantly from the 3.2 million who did so in July.
Hiring was also at its lowest level since 2013, showing that Americans may not be feeling optimistic about the job market and are not finding new jobs or feel confident they could if they left their current companies.
While 5.31 million were hired in August, it was down significantly from 5.41 million the month before. Overall, employment rates were 3.3 percent in August, down from 3.4 percent in July.
Quitting rates are typically a sign of how confident Americans are about the economy, with more workers likely to quit if they feel they have enough disposable income and other job options in the event they leave their workplace.
“It’s certainly a complex issue with multiple factors at play, but ultimately, in my opinion, it comes down to one thing: fear,” HR consultant Bryan Driscoll told me. Newsweek. “Workers are stuck in jobs they don’t like because they don’t believe they can find something better or even survive a gap in employment—an outdated concept. This is not good news for the economy, and frankly, it’s a indictment of a system that clearly fails to support workers.”
When Americans are less confident about the current economy, they tend to vote against the incumbent, which could have big implications for the 2024 election and give Trump a small boost as voters head to the polls.
“It’s about tapping into that fear,” Driscoll said. “He will sell the narrative — and some people will buy the narrative — that only he can fix the economy, conveniently ignoring that under his administration worker protections were destroyed, something he would do even more of in another term.”
While the Federal Reserve just cut interest rates for the first time in four years, slowing inflation may not be indicative of Americans’ perceived economic outlook. Many still face higher prices for necessities ranging from groceries to housing.
“Inflation is coming down,” Fed Chairman Jerome Powell said earlier this year. “The labor market is strong. We want to keep it there. That’s what we’re doing.”
Driscoll said for many, low resignation rates do not signal stability in the workforce, but instead indicate desperation.
“Workers don’t quit because they can’t afford it,” Driscoll said.
If workers compare their current financial security to the past, they may be inclined to believe that Trump would be the better option for the economy and their livelihoods, said Kevin Thompson, a financial expert and founder and CEO of 9i Capital Group.
“A negative economic outlook may favor the former president because people tend to focus on short-term effects,” Thompson said Newsweek. “What’s happening to me right now?” Many may feel they were better off six years ago when the economy seemed more stable before the pandemic. This perception may lead people to believe that their lives were better under Trump.
Robert Shapiro, a political science professor at Columbia University, said anything negative about the current economy could end up giving Trump a boost as it casts doubt on the current administration.
“Any bad news about the economy in general and affecting individuals in particular could hurt Harris by reminding voters of the shortcomings of the Biden administration,” Shapiro said. Newsweek. “It benefits Trump because the election is a referendum on the negative performance of the Biden administration.”
Thompson said that neither Trump nor Biden have had a dramatic impact on the labor market, so voting based on this may be a flawed logic.
“Trump aims to bring back lower-wage factory jobs, which could lead to higher prices due to increased labor costs,” Thompson said. “Biden has monitored the return of jobs lost during the pandemic, but those jobs were expected to return once the economic stimulus measures took effect.”
Many sectors have scaled back their employment due to falling revenues or cutting positions during the pandemic that are no longer needed, said Alex Beene, a financial literacy instructor for the University of Tennessee at Martin.
“This has caused those in jobs to stay put, while employers are cautious about creating new roles,” Beene said Newsweek. “The sentiment and movement, while not on a large scale yet, benefits the Trump campaign as it signals uneasiness with the current economic outlook and a general belief that if Kamala Harris is elected, her administration will continue the same economic policies . which is being implemented.”
Bill Pugliano/Getty Images