For those seeking positive economic news, last week's jobs report underwhelmed. Employers added just 160,000 jobs, below the 200,000 expected by Wall Street. But the release contained a hint of good news: More American workers are quitting their jobs, and Tuesday the Labor Department will tell us more about the so-called quits rate.
Though we generally think of unempoyment as a negative, economists at the Bureau of Labor Statistics see it as a positive sign when more Americans give their two weeks’ notice. A higher share of quitters suggests two things: optimism that another job will be relatively easy to find and confidence that it will pay more. In other words, a rising quits rate tends to presage rising wages.
In April, 10.8 percent of the unemployed had quit their previous job — a significant jump over the previous month and the highest share since 2008.
On Tuesday, investors will be able to peer more deeply into that trend, with the Job Openings and Labor Turnover Survey, or JOLTS, report, which provides a holistic picture of the currents swirling around the U.S. labor market. In addition to providing a quit-and-hire rate — the percentage of workers who were hired and who left their jobs in the previous month — JOLTS tallies the job openings available throughout the country.
Like the quits rate, job openings have surged over the past two years, eclipsing the previous record set a month after the survey began taking regular readings in December 2000. In recent months the growth has moderated, with around 5.4 million jobs open on a monthly basis.
Though the JOLTS data doesn't get the same headline treatment as the monthly employment totals, economists pay close attention to this metric, particularly the quits and hiring rates, the latter of which hit a new cycle high in February.
“We have found these two indicators to be the most closely correlated with job and wage trends,” Deutsche Bank analysts wrote in a note Monday anticipating the release. “Moreover, these series are closely watched by the Fed.”
The JOLTS data, which will be released Tuesday at 10 a.m. EDT by the Bureau of Labor Statistics, covers the month of March.