Is quitting good for the economy?
Source: Peter Cook
Last month’s employment report was strong. But the number of new jobs in the economy is just one part of the picture. The Labor Department’s Job Openings and Labor Turnover survey—JOLTs—digs deeper. It measures the total level of hiring and firing—how much churn there is in the labor market. Fed Chair Janet Yellen is especially interested in the quit rate—how many people voluntarily leave their jobs. After all, quitting is a choice. People only quit when they have something better to do.
And yesterday’s JOLTs report was encouraging. The economy continues to improve.
Source: Calculated Risk
There were 5 million job openings—the highest level in 15 years. Significantly, the level of quits was up significantly from a year ago. When quits started to decline in 2007, that spelled trouble.
Source: Bureau of Labor Statistics, Charter Trust
The labor market keeps getting better, encouraging the Fed to raise rates. As long as they keep it gradual, we shouldn’t be JOLT-ed too badly.
Douglas R. Tengdin, CFA
Chief Investment Officer
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