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WSJ: Workers Quit at Fastest Pace in 17 Years in Possible Economic Boost

WSJ: Workers Quit at Fastest Pace in 17 Years in Possible Economic Boost
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By    |   Thursday, 05 July 2018 02:05 PM

The number of American workers who are quitting reportedly has recently surged, in a possible unexpected boost to wage growth and productivity.

To be sure, workers are choosing to leave their jobs at the fastest rate since the internet boom 17 years ago and getting rewarded for it with bigger paychecks and/or more satisfying work, the Wall Street Journal recently reported.

Labor Department data show that 3.4 million Americans quit their jobs in April, near a 2001 peak and twice the 1.7 million who were laid off from jobs in April, WSJ.com reported.

"Job-hopping is happening across industries including retail, food service and construction, a sign of broad-based labor-market dynamism," the Journal explained.

The trend could stoke broader wage growth and improve worker productivity, which have been sluggish in the past decade. Workers tend to get their biggest wage increases when they move from one job to another. Job-switchers saw roughly 30% larger annual pay increases in May than those who stayed put over the past 12 months, according to the Federal Reserve Bank of Atlanta.

More than one in seven of the nation’s 6.1 million jobless Americans in May were voluntarily unemployed, having left a previous position to look for another, the highest share of voluntary unemployment in more than 17 years, the Journal explained.

However, a steady stream of pink slips are still being issued to American workers.

Employers announced plans to cut 37,202 jobs in June, according to a report issued by Challenger, Gray & Christmas. June’s announced cuts were 18% above May’s figure and 19.6% above last June’s.

The retail sector continued to shed jobs, cutting 3,750 in June. Year-to-date cuts are 21.5% higher than this period last year when 60,127 jobs were cut. The energy sector showed a monthly decrease in cuts, announcing 575 in June. However, the sector has cut 42.0% fewer jobs so far this year compared to 2017.

“In a tight labor market, it’s no surprise employers are hanging on to their current workforces, as four months of this year have seen job cut totals under 40,000. However, in the wake of announced tariffs, we may be entering a period of increased cuts going forward,” said John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, Inc.

To be sure, Newsmax Finance Insider Joel Naroff warns that upcoming labor-market statistics might not be as clear as some investors would hope.

“With the economy booming, it is becoming harder and harder to find workers to hire,” Naroff wrote.

"Tomorrow’s payroll number could be a head scratcher. Clearly, firms are looking for workers and have become somewhat desperate. But if they cannot find them, then job growth could be lower than the consensus of roughly 200,000. I would not be surprised if it is closer to 150,000, even if the labor force participation rate rises," Naroff explained.

"A disappointing number would not be a sign of weakness, other than in labor supply. As I have argued all year, the key number is the hourly wage change. If we get the expected pop in wages, it will be taken as a warning that the labor market tightness is finally creating higher wages," Naroff said.

"This is a terrible measure, but it is closely watched nonetheless. I don’t like it because it is a weighted average, so it is possible that the average wage rate can fall even if all wages rise."

(Newsmax wire services contributed to this report).

© 2019 Newsmax Finance. All rights reserved.

   
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The number of American workers who are quitting reportedly has recently surged, in a possible unexpected boost to wage growth and productivity.
workers, quit, job, hopping, economic, boost, wsj
573
2018-05-05
Thursday, 05 July 2018 02:05 PM
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