It’s quitting time.
The number of Americans leaving jobs voluntarily rose 7% to 3.1 million in December, the Labor Department said Tuesday.
That was the highest since December 2006, and it confirms that the job market had hit its stride in December. It shows worker confidence in the ability to find another job, which had remained fragile, has picked up.
Economists believe worker confidence will boost stronger wage gains, which have been elusive in the current recovery and are considered key to more robust economic growth.
“The pickup in quits reflects workers feeling additional job opportunities are more widely available,” Wells Fargo economists wrote in a research note Tuesday. “Job switching is an important source of an individual’s wage growth. In addition to firms having to compete more heavily via wages as the labor market tightens, the bump in wages reflects the presumed productivity enhancements of better matching workers with available jobs.”
There was other good news in Labor’s Job Openings and Labor Turnover Summary. Job openings rose 5% to 5.6 million in December, the second-highest ever recorded, behind only July 2015, when it touched 5.7 million.
Hires rose to 5.36 million from 5.25 million. That’s not just good for job-seekers — it also shows that employers and workers are matching up. When openings are much higher than hires, it may signal workers don’t have the skills employers need.
One drawback of the JOLTS survey is its delayed release, as it doesn’t reflect the situation in January, when the government reported a slowdown in job growth.