The number of American workers
voluntarily quitting their jobs jumped in December to the highest level in
nearly 17 years, in a strong show of confidence in the labor market which
further bolsters expectations of faster wage growth this year.
The Labor Department’s monthly
Job Openings and Labor Turnover Survey (JOLTS) report published on Tuesday came
on the heels of news last week that annual wage growth in January was the
strongest in more than 8-1/2 years. The labor market is almost at full employment.
The number of workers willingly
leaving their jobs increased by 98,000 to 3.259 million, the highest level
since January 2001. That lifted the quits rate to a 2.2 percent from 2.1
percent in November. This rate, which the Federal Reserve looks at as a measure
of job market confidence, has rebounded from a low of 1.3 percent in late 2009.
“I had thought that by now, the
fear of moving to another company would have faded,” said Joel Naroff, chief
economist at Naroff Economic Advisors in Holland, Pennsylvania. “It really
hadn’t very much, though maybe it is finally happening.”Rising job turnover
boosts economists’ optimism that wage growth will accelerate this year and in
turn help to push inflation toward the Fed’s 2 percent target. While economists
remain confident that the U.S. central bank will increase interest rates at
least three times this year, much would depend on the fortunes of the U.S.
Stocks on Wall on Monday recorded
their biggest drop since August 2011 as concerns over rising U.S. interest
rates and government bond yields hit record-high valuations of stocks.
“The data today are likely to
keep the Fed on the path of gradual rate hikes this year as long as the stock
market stabilizes from its death plunge the last two weeks,” said Chris Rupkey,
chief economist at MUFG in New York.
“Labor market conditions are
picture perfect today, but that can change in a hurry if worsening financial
conditions and plunging markets take a toll on business confidence.”
The JOLTS report also showed that
job openings, a measure of labor demand, decreased 167,000 to a seasonally
adjusted 5.8 million. Still, job openings are not too far from a record high of
6.2 million touched in September.
The decline in job openings in
December was led by the professional and business services sector, which saw a
decrease of 119,000. Job openings in the retail trade sector fell 85,000 while
vacancies in construction dropped 52,000.
But job openings in the
information sector increased 33,000 and the federal government had an
additional 13,000 vacancies in December. The jobs openings rate slipped
one-tenth of a percentage point to 3.8 percent in December.
Hiring was little changed at 5.49
“The recent moderation across
much of the JOLTS data is not alarming to us given that levels still remain
favorable across much of the data and that we have been expecting the pace of
job growth to cool relative to the recent strong gains,” said Daniel Silver, an
economist at JPMorgan in New York.