After a tough week at work many Americans are probably tempted to tell their bosses they’re quitting, but few actually have the courage to do so, especially with unemployment hovering above 8%.
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However, a new report released this week shows that thinking may be changing a bit as more people feel confident enough about the job market to leave their current employer for seemingly greener pastures.
According to the government’s Job Openings and Labor Turnover Survey, or JOLTS, the number of people who quit their jobs in February soared 4.4% from the prior month and 9% year-over-year.
Further, job quits accounted for 51.1% of all job separations, meaning people left their jobs willfully more than involuntarily. That marks the first above-50% reading in that category since the financial crisis erupted in September 2008, according to a research note by ConvergEx.
In contrast with a pair of gloomier updates on the labor markets, the JOLTS quitting data suggest there is a stronger sense of confidence in the ability to find a new job. After all, few people would even consider quitting and entering the depressed job market during the downturn.
“It certainly is a positive indicator for the labor market going forward. It goes to the point of: Do businesses really have more heads to cut?” said Russell Price, senior economist at Ameriprise Financial (NYSE:AMP). “In general, businesses really have cut to the bone and layoffs right now are below even the rates we have seen during the best of times in the late 1990s.”
The JOLTS report, which was released by the Bureau of Labor Statistics with its typical one-month lag, reveals a month-over-month increase in job quits in a slew of sectors, including leisure and hospitality, professional and business services and manufacturing.
While the 2.1 million quits in February were well below the 2.9 million of December 2007 -- the first month of the recession -- they were still up 4.4% from January.
Overall the JOLTS report showed the number of job openings in February remained steady at 3.5 million and the hiring rate of 3.3% was similarly little changed. There were 12.8 million people unemployed in February, translating to 3.7 unemployed job seekers per opening, flat from the prior month but tied for the lowest ratio since November 2008, according to Barclays.
In February workers were most willing to leave their jobs in the Midwest, which saw a 13.8% month-over-month leap in job quits. Layoffs and discharges shrank by 3.5% in that region, compared with a 10.6% rise in the Northeast.
“Quits tend to rise when there is a perception that jobs are available and tend to fall when there is a perception that jobs are scarce,” the JOLTS report said.
The influx of job quits corresponds with a rise in other confidence metrics as last month’s University of Michigan consumer sentiment index rose for a seventh straight month to its highest level since February 2011.
While the JOLTS report often gets lost in the shadows of its higher profile and more timely cousins, economists did scour the February report for evidence to support March’s dreary jobs report. Last week the government said the U.S. created just 120,000 jobs last month -- barely half as many as had been anticipated.
“Careful analysis of February’s JOLTS data leaves us scratching our heads and hoping March was an anomaly,” market strategists from ConvergEx Group wrote in the note.
Those worried about the labor market likely weren’t heartened by Thursday’s report from the government that showed new claims for unemployment unexpectedly leaped to 380,000 last week -- the highest level since late January. The Labor Department also raised its claims estimate from the prior week.
Still, Price remains guardedly optimistic about the legitimacy of recent advances in the U.S. labor market.
The JOLTS data “really did not provide evidence we’re seeing a big change in direction for the overall labor market,” said Price.
Pointing to ebbing gas prices and other positive signs in the economy, Price said, “I really think the nonfarm payroll number from March will be a pause and it will continue to improve from here.”