Great news! More people are quitting their jobs

Lotto QuitGiant LottosTV/youtubeA wonderful sight.

The jobs report came in pretty mixed on Friday. The total number of jobs added was disappointing, though wage growth was strong.

There is one other piece of strong news coming out of the report: more people are quitting their job.

“More quits. People are telling employers to put up or shut up,” said Neil Dutta of Renaissance Macro. “Job leavers as a per cent of unemployment hit a cycle high of 10.8%. Job switching –> wage growth.”

Essentially what Dutta is getting at is that workers typically don’t voluntarily quit their jobs unless they feel good about securing other employment. Additionally, Dutta’s read-through (he called the number “the best news in the jobs report”), is that many people look for better employment through higher wages, so as quits increase so too will worker pay.

For a labour market that is getting closer and closer to full employment, the expectation is that headline jobs growth will slow since there is a smaller pool of workers to draw from. The focus then shifts to wage growth, as wages continue to lag and labour’s share of corporate income is still low.

Thus, Dutta thinks this is a good sign.

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