The Labor Department revealed in an economic news release Tuesday that the number of Americans quitting their jobs hit a nine-year high in December, indicating that labor market strength is increasing despite a slowdown in economic growth.
The number of Americans voluntarily leaving their jobs rose 7 percent to 3.1 million - the highest since December 2006, a clear indicator that members of the U.S. labor force have renewed confidence in their ability to find new jobs. This development can also serve to ease concerns about a potentially faltering economy as the National Federation of Independent Business reported small business confidence falling to a two-year low amid a grim outlook for business conditions and sales growth.
"If the labor market is tightening, can the economy really be faltering?" said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Penn., according to Fortune.
In light of this development, economists believe a boost in stronger wage gains - considered critical to more robust economic growth - won't be far behind.
"The pickup in quits reflects workers feeling additional job opportunities are more widely available," Wells Fargo economists wrote in a research note Tuesday, according to MarketWatch. "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."
The department's Job Openings and Labor Turnover Summary (JOLTS) detailed further good news as well. The report showed that there were 5.6 million job openings during December, the second-highest since July 2015's 5.7 million, and surpassed the predicted 5.41 million.
Furthermore, the hires rate was 3.7 percent, rising to 5.36 million from November's 5.25 million, an indicator that employers had little trouble finding qualified applicants for open positions.
Despite the positive outlook, there is one negative to take from the report. Since the release is delayed, it doesn't reflect the situation in January, a month that the government reported a slowdown in job growth as unemployment rate hit an eight-year low.
