Highest quitting rate since 2008 is a key indicator of rosier economic times
In good news for the U.S. economy, the Labor Department reported that 2.8 million workers, or 2% of U.S. employees, voluntarily left their jobs in September — the fastest rate since 2008.
It might sound strange, but Janet Yellen, Federal Reserve Chair, has zeroed in on the quits rate as a progress marker for returning to a healthy labor market, reports Reuters.
The 2007-09 recessions saw a decrease in the quits rate, with most workers not optimistic enough about the economy to seek opportunities elsewhere. Analysts feared that this had created wage stagnation.
Although joblessness has been decreasing, the lack of worker turnover meant employers had no reason to increase salaries. But according to this latest report, hiring rates are now increasing, giving people more employment options.
The report also highlighted that the job openings rate has fallen, but still remained above pre-recession levels. In the first week of November, the Labor Department reported 278,000 claims for unemployment benefits from the state.
However, “this increase is nothing to worry about,” Ian Shepherdson, a Pantheon Macroeconomic economist, told Reuters, explaining that the claim figure has remained under 300,000 for nine consecutive weeks.