gave the same message – one shared by other firms too, executives have told Breakingviews. That creates the problem of headcount costs remaining too high, at least for a while.
Companies generally don’t hope their staff will walk. But when interest rates are going up and workers demand higher pay, attrition feels like a painless way to bring down wage bills. That's not so easy anymore, since the so-called quit rate – the percentage of the workforce leaving their employer – has sunk back to its low levels from before the pandemic.
of recent years was an example of how people can behave in surprising ways, temporarily distorting economic predictions. This season’s corporate earnings may tell whether another surprise is in the works.The percentage of workers leaving their employer in the United States fell to 2.4% in July from 2.6% in the previous month, the Bureau of Labor Statistics said on Aug. 1. The so-called quit rate in the finance and insurance sector dropped to 1.1%, well below a peak of 2.4% in April 2022.
Wells Fargo flagged “slower than expected” attrition as a driver of higher severance costs during the bank’s July 14 earnings call. State Street cited similar pressure from low attrition during its own analyst call on the same day. Citigroup also mentioned severance expenses as a reason for its 9% year-over-year increase in operating costs on July 14.
The U.S. economy added 187,000 nonfarm payrolls in July, the Bureau of Labor Statistics said on Aug. 4. The unemployment rate dipped to 3.5% from 3.6%.Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.