January 2019 JOLTS: Quitting Is Back On Track
Today’s JOLTS report shows a strong labor market and a reversal in the short-lived but puzzling trend of declining quitting. The number of vacancies outnumbered the ranks of the officially unemployed for the 11th straight month, something that had never previously happened in the JOLTS data. The question now is will workers be increasingly tempted to switch to new jobs or will their current employers raise wages to keep them.
Job openings in January were strong at 7.6 million, indicating that employer demand is still quite strong. The quits rate for private sector workers ticked up slightly to 2.6% as the total number of quits increased and returned to levels last seen in the fall. Most jobs in the US labor market end now when a worker wants it—there were just about two quits for every layoff in January, a sign that workers have more leverage.
With a tight labor market, employers are turning toward hiring already—employed workers. The question is whether they will be able to successfully lure them away or whether workers’ current employers will boost compensation to keep them. With wage growth picking up, the next thing to watch is how demand for already-employed workers turns into higher earnings for that group.