More Americans are thinking twice about leaving their jobs, as confidence in the economy continues to decline.

According to the Bureau of Labor Statistics (BLS), 44.463 million people quit their jobs last year. While that seems like a huge number, it’s 6.1 million fewer than the year before.

The pace of quitting also weakened toward the end of 2023, with December seeing the fewest resignations in nearly three years.

Fewer resignations suggest the balance of power in the labor market is shifting back to the employer.

During the pandemic, employers were falling over themselves to find workers—and offering hefty compensation packages to lure them in. At one point, there were more than 12 million job openings in the U.S., according to the BLS’ JOLTS report. That’s the highest level ever recorded.

Since peaking in March 2022, job openings have plunged by more than 3 million. As a result, Americans don’t have the same bargaining power as they did during the pandemic.

“On the surface, things look really good and robust, but when you dig deeper, it’s a labor market that is being driven by a narrower set of industries and is showing signs of substantial slowing,” Brett Ryan, senior U.S. economist at Deutsche Bank, told The Wall Street Journal.

Ryan explained that last year’s job growth was mainly driven by three industries—leisure and hospitality, government, and healthcare.

Anyone who’s read the headlines lately knows now is not the time to quit your job—unless you have a better offer lined up.

Huge layoffs become widespread

One of the most telling signs that the economy is losing steam is the sheer size and magnitude of job cuts in recent months. As Creditnews reported, tech firms have laid off roughly 24,000 workers in January alone.

But layoff season isn’t just limited to the tech sector.

UPS grabbed headlines on Jan. 30 when the courier service announced it was cutting 12,000 workers.

Earlier in the month, retailers Macy’s, Wayfair, and Walmart announced layoffs affecting thousands of employees.

According to markets commentator Kobeissi Letter, at least 19 companies have made substantial job cuts over the last three months. Twitch, Hasboro, and Spotify have laid off between 17% and 35% of their employees, while big financial firms BlackRock and Charles Schwab have laid off 3% and 6% of their workers, respectively.

Meanwhile, Citigroup announced in January it would phase out 20,000 workers over the next two years after the bank reported a $1.8 billion net loss in the fourth quarter of 2023.

Do these layoffs scream “soft landing”? Some economists aren’t so convinced.

Soft or hard landing?

The term soft landing refers to the Fed’s coordinated cooling of the economy— a “Goldilocks porridge” where growth is neither too hot nor too cold.

If a cooling labor market is a leading indicator for the rest of the economy, there’s always a risk that a soft landing becomes a hard one.

“Every hard landing starts with a soft landing,” said Ron Kruszewski, CEO of Stifel Financial, a full-service brokerage firm.

In other words, it may seem like the Fed is cooling the economy just enough to avoid recession—until a recession shows up anyway.

About 23% of investors in a Bank of America survey think this scenario is most likely to play out. The survey respondents represent firms collectively managing nearly $700 billion in assets.

Others think that a hard landing will be caused by the Fed.

“The real danger here is that the Fed loosens prematurely, which is exactly what they did in the late 1960s,” Mark Higgins, senior vice president for Index Fund Advisors, told CNBC.

Higgins is referring to the possibility of the Fed cutting rates too early, which runs the risk of re-heating inflation. And if inflation gets entrenched as it did in the 1970s, we could be looking at a period of stagflation—high inflation and uneven growth.