An extremely useful measure of the health of the labor market is, perhaps surprisingly, the number of voluntary quits. All else equal, a larger number of voluntary quits represents a labor market where job opportunities are more plentiful. When job opportunities are plentiful, employed workers have the chance to change jobs that are a better match for their skills, experience, and interests and where they are more productive and command higher wages. During downturns, not only does hiring go down, so does the number of voluntary quits, as outside job opportunities become scarce.
The figure above shows the number of voluntary quits over time. Between 2007 and 2009, the average number of voluntary quits dropped by more than 40 percent, from 2.9 million per month to 1.7 million per month. It has picked up somewhat since that time, but by the end of 2011 it was still 34 percent below its 2007 level. Three useful observations from this figure are the following: