Americans Clinging Tightly to Jobs in Sluggish Labor Market

When workers quit their jobs, it signals a stronger labor market

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Quitting your job can signal a lot of things: burnout, a bad boss ... or even a healthy economy. It's too bad, then, that American workers are still holding on tightly to the jobs they have.

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According to the latest Job Openings and Labor Turnover Survey findings from the Labor Department, there were 2.1 million job quits in May. That's barely a change from April and up only slightly from the year before. Growth in quits can be a good sign for the labor market, as it signals that workers are more confident about their chances to trade up on their job.

"In general people are still hesitant to leave their jobs; they still don't see a lot of opportunities elsewhere," says Gad Levanon, director of macroeconomic research at The Conference Board.

That means that the rate of people leaving their jobs shows a different dimension from the headline-grabbing monthly employment numbers. The stagnant quits rate is yet another sign that labor market growth is painfully anemic, and that workers understand that reality all too well.

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May's 2.1 million quits do signal a marked improvement from the recession's end, in June 2009, when workers left 1.8 million jobs. Still, it's much closer to those recessionary doldrums than it is to the 3-million-plus monthly quits seen in 2001 and the mid-2000s boom years.

Likewise, the quits rate remains stuck in neutral. The number of quits as a percent of total employment has been stuck at 1.6 percent since February. That figure has been much higher in the past, staying at or above 2 percent from mid-2004 to mid-2007.

Still, hiring and firing numbers have generally been trending in the right direction since the recession. Layoffs and discharges are down sharply from recession levels and, though volatile, have been relatively flat over the last year and a half.

Hires have shown a general upward trend as well, at 4.4 million in May, up from 3.7 million at the recession's end.

Job openings have grown sharply, climbing more than 50 percent from the end of the recession, with 3.6 million open positions in May.

It's unclear why hiring hasn't shown the same healthy growth as job openings. Some experts say it reflects a skills gap: a gulf between the qualifications that workers have and the skills that employers are demanding. Levanon agrees that this may be the case, but placing all the blame on workers may be a mistake.

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"I think a skill gap is one explanation, but I also think that another explanation that is held by some economists is recruiting intensity—companies are not that desperate to fill a position now, compared to times where they are more desperate to do so," says Levanon.

For the nearly 13 million unemployed Americans, however, the bottom line remains the same: a job market that is showing little promise of relief.

"Overall, there is no indication that the labor market is going to pick up anytime soon," says Levanon.

Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter at @titonka or via E-mail at