United States Job Quits
Job quits are an important metric for measuring worker mobility and labor market tightness. In the United States, the number of job quits dropped by 207,000 in January 2023 to 3.88 million, the lowest level since May 2021, and well below record peaks of 4.5 million quits touched in November 2021. While the decline suggests a possible slowdown in the pace of worker turnover, the number remains historically high, which could force businesses to pay more to keep their workers.
The quits rate, which measures voluntary job leavers as a share of total employment, edged down to 2.5 percent in January from December's revised figure of 2.6 percent, but it remains elevated compared to historical levels. The drop in job quits was most significant in professional and business services (-221,000), educational services (-14,000), and federal government (-5,000).
The job quits rate serves as an indicator of the health of the labor market. A high quits rate indicates that workers are confident in their ability to find new employment, which can put upward pressure on wages and create competition for employers to retain their workers. On the other hand, a low quits rate can indicate a lack of job opportunities or worker insecurity, which can suppress wage growth.
In addition to job quits, other labor market indicators, such as the unemployment rate, non-farm payrolls, and labor force participation rate, provide important information on the health of the economy. For example, the unemployment rate remained low at 3.4 percent in January 2023, indicating a tight labor market, while non-farm payrolls increased by 517,000, which suggests robust job creation.
Overall, the decline in job quits in January may signal a slowdown in the pace of worker turnover, but the historical level of job quits remains high, which suggests continued tightness in the labor market. As businesses compete to retain their workers, wages could continue to rise, potentially contributing to inflationary pressures. Investors should continue to monitor job quits and other labor market indicators for signs of economic strength or weakness
Disclaimer: ChatGPT, a language model, was used as an aid in the creation of this post. We want to be transparent and honest about our use of ChatGPT. Please note that while ChatGPT was helpful in speeding up the writing process, it was not relied upon to solely create the content of this post. The opinions and views expressed in this post are solely those of the author and not influenced by ChatGPT or any other language model.