'Definitely good for wages': Economist
WASHINGTON (Reuters) — In a paradoxically gooddevelopment for the U.S. economy, Americans quit their jobs in September at thefastest rate in over six years.
Other data on Thursday showed the number of new joblessclaims rose last week but remained near a 14-year low, and the two readingssuggested the U.S. labour market was moving toward full health.
Two per cent of U.S. job-holders, or about 2.8 millionworkers, left their jobs under their own volition in September, the LaborDepartment said.
That's important for two reasons.
One, the quits rate fell during the 2007-09 recession andhas been slower to recover than other labour market indicators because workerslacked confidence to leave their jobs for greener pastures. Some analystsbelieve this has helped keep wage gains stagnant even as the jobless rate hasfallen because employers don't have to raise wages as much to retain talentwhen there is less employee turnover.
Second, Federal Reserve Chair Janet Yellen has signaled thequits rate as an indicator she is following on her "dashboard" forassessing progress in the labour market's recovery.
"It's definitely good for wages," said JosephLaVorgna, chief U.S. economist at Deutsche Bank. "Also, the chair of theFederal Reserve is looking at it, and if she's looking at it, we have to aswell."
The Fed last month gave an upbeat view of the jobs market,saying that labour market slack was "gradually diminishing."
Thursday's data also showed the rate of hiring, whichoccupies another place on Yellen's dashboard, rose in September. The jobopenings rate, which has already returned to the levels seen just before therecession, fell.
In a separate report, the Labor Department said initialclaims for state unemployment benefits rose 12,000 to 290,000 for the weekended Nov. 8.
That was a bigger increase than expected, but claims havenow been below 300,000 for nine straight weeks, suggesting firms are well pasta cycle of elevated layoffs that began in the recession.
"This increase is nothing to worry about," saidIan Shepherdson, an economist at Pantheon Macroeconomics. "Claims canremain close to their current trend for an extended period."
Yields on U.S. government debt were little changed followingthe publication of the two Labor Department reports.