Job terminations at record pace
Peak of 4.5 million by November
The Numbers: The number of Americans quitting their jobs rose 370,000 in November to a record 4.5 million. The churn rate rose from 2.8% in October to 3%. This also corresponds to an earlier record high.
At the same time, the number of vacancies fell on the last day of November by 529,000 to 10.6 million, as the Ministry of Labor announced on Tuesday.
Economists polled by The Wall Street Journal had forecast an increase to 11.1 million vacancies.
Key details: The report also shows the layoffs rose slightly by 19,000 to 1.37 million. The discharge rate was 0.9% for the fourth consecutive month.
The number of new hires rose by 191,000 to 6.7 million in November. The hiring rate rose to 4.5% compared to 4.4% in the previous month.
The big picture: The fact that workers can quit their jobs to get a better job is a sign of a healthy economy, according to economists. But nothing is easy. Some analysts fear that a high churn rate could lead to higher wage inflation and cause the Fed to step on the brakes to cool the economy down.
Experts noted that the sharp surge in layoffs was concentrated in the low-wage sectors. That could ease inflation worries.
Fed chair Jerome Powell said last month that the JOLTS data is important to his team in setting interest rate policy.
The JOLTS data is usually released after the government's employment report, but this month the data is released on Friday. Economists expect 422,000 jobs to be created last month and the unemployment rate to fall from 4.2% to 4.1%. Labor market health will be key to the timing of any Fed rate hike.
Investors now see more than a 50% chance the Fed will hike rates in March.
What do you think? "The churn rate in the private sector is at an all-time high of 3.4%. Whether these conditions will continue through 2022 is one of the most important questions for the coming year," said Nick Bunker, director of research at Indeed Hiring Lab.
Market reaction: The stock markets (DJIA, -1.07%, SPX, -1.94%) rose when they opened on Tuesday, continuing the positive mood of the strong start to the stock market year.