More Workers Are Quitting Their Jobs

According to Janet Yellen, Chairman of the Federal Reserve Board, an important indicator of labor market health is the job quit rate: how many workers are voluntarily leaving their jobs?

As Rob Garver at the Fiscal Times explains, the idea that a high quit rate is a good thing is based in the notion that most workers would not voluntarily leave their jobs unless they felt confident that they could find another.

Quit rates have generally corresponded with ups-and-downs in the economy. For example:

– Prior to the recession, the quit rate per month for non-farm workers was above 2 percent.
– During the recession, that figure dropped to 1.3 percent – a low that had not been seen for a decade.
– While the recession officially ended in 2009, quit rates remained low until recently.
– Over the last two years, the quit rate has slowly risen, reaching 1.8 percent in the month of June.

Yellen spoke about this issue recently, saying that the economy has yet to fully recover but that the rising quit rate means that the economy is heading in the right direction. “[M]ore workers voluntarily quit their jobs when they are more confident about their ability to find new ones and when firms are competing more actively for new hires. Indeed, the quits rate has picked up with improvements in the labor market over the past year, but it still remains somewhat depressed relative to its level before the recession.”

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