When an American worker quits his or her job, it may seem like bad news. The worker will need to find a new source of income and the employer will have to fill a vacancy.
But in terms of economic indicators, we’re seeing more and more Americans willing to walk away from their jobs – and that’s actually terrific news.
U.S. employers advertised the most jobs in 14 years in January, and more workers quit – both signs of a steadily strengthening job market.Job openings rose 2.5 percent to nearly 5 million, the most since January 2001, the Labor Department said Tuesday. The number of people who quit their jobs increased 3 percent to 2.8 million, the most in more than six years.
The “quit rate” has been steadily increasing over the last several months, as the unemployment has steadily decreased. That’s not a coincidence.
Indeed, the last time the U.S. “quit rate” was this high was well before the Great Recession even started, which also isn’t a coincidence.
When workers are feeling economic anxiety and believe there just aren’t many job opportunities, they do exactly what you’d expect: they keep their current job. Love it or hate it, those folks want a paycheck and they realize that if they voluntarily give up their gig, finding a new job in a tight market is likely to be awfully difficult.
But when more people start quitting, it’s a sign of confidence – these folks assume that they’ll be able to find something else, probably better than what they have, without too much trouble.
It’s generally what happens when the unemployment rate drops nearly five points in five years.
As for the increased number of job openings, this too is indicative of an increasingly healthy market – not only does the jobless rate drop when those vacancies get filled, but it’s the sort of thing that happens when employers expect to have more business, requiring a larger workforce.
All in all, these are exactly the kind of conditions we want to see for a sustained recovery.