US workers are quitting their jobs like crazy.
On Thursday, the latest JOLTS report from the BLS showed that the quit rate for US workers rose to 2% in September, with total job quits rising to 2.8 million, a six-year high.
And the read-through on quits is this: workers will quit their job if they are more confident they can find another one.
Late last month, the Fed ended its quantitative easing program, starting the countdown to the Fed’s first interest rate hike since the financial crisis.
In a note following that announcement, Chris Rupkey, chief financial economist at MUFG, wrote that the Fed’s statement implied it had “capitulated” and became willing to admit that there is real strength in the economy and the labour market, despite inflation that remains below the Fed’s 2% target.
And in an email following Thursday’s JOLTS report, Rupkey reiterated this stance, writing:
“Fed Chair Yellen has famously pointed to the Quits Rate also in these Jolts data. If you feel secure enough to quit your job then the economy must be pretty good. Well, the Quits Rate jumped in September to 2.8 million people from 2.5 million in August. The number of Quitters out there in the economy, you know who you are, is just the same now as it was back in 2004 when the Fed started normalizing interest rates.”
Torsten Slok, chief international economist at Deutsche Bank, also circulated a chart following the report that not only highlighted the quits rate, but Yellen’s prior emphasis on this figure.
Slok’s chart shows the quit rate moving back to pre-crisis levels, and argues that this chart is the catalyst the Fed needs to begin raising rates.