WASHINGTON (Reuters) - In a paradoxically good development for the U.S. economy, Americans quit their jobs in September at the fastest rate in over six years.
Other data on Thursday showed the number of new jobless claims rose last week but remained near a 14-year low, and the two readings suggested the U.S. labor market was moving toward full health.
Two percent of U.S. job-holders, or about 2.8 million workers, left their jobs under their own volition in September, the Labor Department said.
That’s important for two reasons.
One, the quits rate fell during the 2007-09 recession and has been slower to recover than other labor market indicators because workers lacked confidence to leave their jobs for greener pastures. Some analysts believe this has helped keep wage gains stagnant even as the jobless rate has fallen because employers don’t have to raise wages as much to retain talent when there is less employee turnover.
Second, Federal Reserve Chair Janet Yellen has signaled the quits rate as an indicator she is following on her “dashboard” for assessing progress in the labor market’s recovery.
“It’s definitely good for wages,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “Also, the chair of the Federal Reserve is looking at it, and if she’s looking at it, we have to as well.”
The Fed last month gave an upbeat view of the jobs market, saying that labor market slack was “gradually diminishing.”
Thursday’s data also showed the rate of hiring, which occupies another place on Yellen’s dashboard, rose in September. The job openings rate, which has already returned to the levels seen just before the recession, fell.
In a separate report, the Labor Department said initial claims for state unemployment benefits rose 12,000 to 290,000 for the week ended Nov. 8.
That was a bigger increase than expected, but claims have now been below 300,000 for nine straight weeks, suggesting firms are well past a cycle of elevated layoffs that began in the recession.
“This increase is nothing to worry about,” said Ian Shepherdson, an economist at Pantheon Macroeconomics. “Claims can remain close to their current trend for an extended period.”
Yields on U.S. government debt were little changed following the publication of the two Labor Department reports.
Reporting by Jason Lange; Editing by Andrea Ricci