July 2018 JOLTS Report: Workers Are Quitting, but Will They Soon Prosper?
The rate at which workers are quitting jobs hitting levels not seen since April 2001.
In July, just under 3.6 million workers quit their jobs, according to new data released today from the Job Openings and Labor Turnover Survey (JOLTS.) That’s roughly 2.4% of all employed workers during the month; workers haven’t quit at such a rate since April 2001. The rate was even higher in the private sector, as 2.7% of workers left their jobs. Workers leaving their jobs more readily is a sign not only of increased worker confidence, but strong demand from employers for workers. Yet, there may be more room for growth as these rates are still not at all-time highs.
Other indicators from the JOLTS report signal a strong demand for workers. Job openings hit an all-time high for the series with 6.9 million open jobs in July. As has been the case for several months now, the number of open jobs is greater than the number of officially unemployed workers. In July, there were .91 unemployed workers per job openings. A ratio this low may explain why the recent uptick in quitting as a tighter labor market shifts hiring away from the hiring of the unemployed to the hiring of already employed workers.
The unemployment-to-openings ratio varies quite a bit by industry, though most industries have a ratio below one over the past 3 months. The relative rankings of the industries are fairly consistent, however. For example, construction currently has the highest ratio, but also did during the depths of the recession and prior to the recession as well.
A tighter labor market appears to be giving workers a confidence boost. But whether that confidence will help boost wage growth is yet to be seen. Hopefully, quitters will end up prospering.