According to data released in the Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics (BLS) on Tuesday, Oct. 12, job quits to total separations reached a record high of 71.1% in August. Co-founder of DataTrek Research Jessica Rabe believes that this indicator provides useful insight into current job market conditions.
“Our ‘Take this job and shove it’ indicator – or quits to total separations – rose to a record high of 71.1% in August since the series started in December 2000,” Rabe said in DataTrek’s Morning Briefing newsletter. “That’s due to an all-time high in quits as a percentage of the labor force (2.6 pct) and a record low in layoffs/discharges as a percentage of the workforce (0.8 pct).”
DataTrek Research, co-founded by Rabe along with Wall Street veteran Nicholas Colas, provides a daily financial newsletter to hedge funds, asset managers, RIAs/family offices, and other investment firms.
Indeed, Americans are leaving their jobs at record rates. A total of 4.3 million Americans quit their jobs in August, as workers jump ship to seek higher wages and better employment conditions. The quits to total separations indicator hitting its all-time high comes around a year and a half after it reached its all-time low of just under 18% in April 2020.
Two industries setting the tone
Rabe noted that retail trade and accommodation and food services represented 81% of the monthly jump in overall quits in August.
“Workers continue to leave the retail and restaurant industries amid challenging demands put on existing staff due to labor shortages and other measures, such as mask requirements for customers,” she said.
According to Rabe, the high quits rate in these industries throughout the pandemic means that they will remain especially constrained amid the current labor crunch. She believes that the labor market dynamics will also continue to weigh on overall employment given the size of both industries.
“For example, right before the pandemic hit in February 2020, retail trade and leisure and hospitality made up a fifth of total nonfarm payrolls,” Rabe said. “Ultimately, this is a sign that employers are still not willing to increase pay enough to attract and retain employees, which should put upward pressure on wages.”
Jobless claims numbers released by the Department of Labor Thursday morning also beat consensus estimates compiled by Bloomberg, with initial unemployment claims for the week ended Oct. 9 coming in at 293,000 against 320,000 expected and a revised 329,000 during the prior week. Continuing claims for the week ended Oct. 2 amounted to 2.593 million against 2.670 million expected and a revised 2.727 million during the prior week.
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV