The “quits” rate time series produced by the Job Openings and Labor Turnover Survey (JOLTS) is a leading indicator of US hourly pay. As wages account for around 55% of a product’s or service’s price*, wage inflation and overall inflation rates tend to be closely related. Former Federal Reserve chief Janet Yellen was known to pay close attention to the quit rate but whether new Fed chief Jerome Powell regards the indicator with as much interest is as yet unknown.
Figures released as part of the most recent JOLTS report show the quit rate increased from 2.2% to 2.3% of the non-farm workforce at the end of March. Higher quit rates in the “other” and retail sectors were offset by lower rates in finance, insurance, professional and business service sectors.
The total number of job openings also increased to its highest level since the series began in December 2000. Total openings during March increased from just under 6.1 million to 6.6 million with the largest number of openings in the professional and business services and the construction sectors. Job openings as a percentage of the non-farm workforce climbed from 4.1% to 4.4%.