It Might Not Be Quitting Time Yet for the Fed’s Rate Hawks

livemint.com:

Not as many Americans are quitting their jobs each month as last year. That might mean the Federal Reserve can quit worrying so much about wage inflation. The Labor Department on Tuesday reported that a seasonally adjusted 3.8 million people quit their jobs in June, down from 4.1 million in May.

That brought the quits rate—the number of people quitting their jobs as a share of overall employment—to 2.4% from May’s 2.6%. In November of 2021, and again in April of last year, the quits rate hit a record of 3%. But June’s quits rate was still a bit higher than the 2019 average of 2.3%, which itself was historically high.

Tuesday’s report showed that the number of unfilled job openings haven’t come down as much. On the last day of June, there were 9.6 million job openings—slightly lower than in May. That left the number of job openings per unemployed person at 1.6—not as high as the record 2.1 notched in May of last year but still well above the 2019 average of 1.2.

Economists generally pay closer attention to openings than quits. Openings lie at the heart of the Beveridge curve—the plotting of the opening rate versus the unemployment rate named after the late British economist William Beveridge that lays out how efficiently the economy is matching jobs with workers. Since the pandemic, the job-openings-to-unemployment ratio has been a particular focus at the Federal Reserve, with policy makers putting forth the idea that a drop in openings could help cool wage inflation without a commensurate jump in the unemployment rate.