Almost all of the economic data out there confirm a tight labour market with unemployment very low and job openings high.
Each month, the Bureau of Labour Statistics publishes its Job Openings and Labour Turnover Survey (JOLTS), which offers a little more colour on the labour market.
One interesting stat is the quit rate.
“Quits are generally voluntary separations initiated by employees,” said the BLS. “Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.”
A rising quit rate is understood to reflect increasing confidence among the workforce. And according to the new JOLTS report, quits continue to greatly outpace layoffs and discharges combined.
“The number of quits has exceeded the number of layoffs and discharges for most of the JOLTS history,” noted the BLS. “During the latest recession, this relationship changed as layoffs and discharges outnumbered quits from November 2008 through March 2010.”
Indeed, during tough times companies will cut staff to match their declining needs. And workers probably recognise this and are more reluctant to quit.
In September, there were 2.7 million quits and 1.7 million layoffs and discharges.
“For total labour market, the quits rate was unchanged at 1.9% for the sixth consecutive month,” Barclays’ Jesse Hurwitz noted. “This, along with a steady unemployment insurance utilization rate suggests that worker confidence held steady in September despite a slower pace of employment growth during the month.”
With job openings high and worker confidence very firm, workers have the leverage to demand more money.
“[T]hat quit rate is still consistent with a pick-up in wage growth to almost 3.0% next year,” Capital Economics Paul Ashworth estimated.
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