The latest monthly “Job Openings and Labor Turnover Survey” (JOLTS) showed that in December, the total number of quits was 3.1 million, the highest level in a decade, while the quits rate was 2.1%, the highest since April 2008.
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Companies posted almost 5% more job openings, 5.6 million, that’s the most since July.
Meanwhile, the number of people quitting jobs in December jumped from 2.9 million to 3.1 million, highest since December 2006. Employers have also struggled to fill many open jobs, which could push them to offer higher pay to attract workers. The unemployment rate fell to an eight-year low of 4.9%.
“The December JOLTS report sent an upbeat message about conditions in the labor market”, J.P.Morgan economist Daniel Silver said in an online note Tuesday.
There’s a new update on the job market.
Through most of the jobs recovery, openings have outpaced hiring and quits. “But now the labor market has tightened to a point where its beginning to turn into a workers’ market rather than an employers market”.
USA manufacturing is shrinking in the face of slowing overseas growth and the stronger dollar, while measures of the service sector have also declined.
“You tend to see higher wage growth when there’s more churn in the jobs market”, said Neil Dutta, head of USA economics at Renaissance Macro Research LLC in NY.
The number of people hired increased to 5.36 million from 5.26 million, while the hiring rate was little changed at 3.7%.
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The quits rate, which takes the number of quits divided by the number of employees who worked, is one of the figures most closely watched by Federal Reserve Board Chair Janet Yellen, as it is considered a good indicator of the health of the labor market. That adds pressure on the Fed to raise interest rates. That has prompted many economists to forecast as few as one or two rate hikes this year, below the Fed’s own forecast of four increases.
