What Is the Quits Rate?
The Quits Rate measures the percentage of workers who voluntarily leave their jobs each month. Because quitting is typically a sign of confidence in finding better opportunities, this indicator reflects worker sentiment, labor market tightness, and overall economic strength.
A high quits rate signals strong labor demand and worker bargaining power. A declining quits rate often indicates cooling conditions or rising uncertainty.
Why the Quits Rate Matters
- Worker confidence indicator Employees quit more often when jobs are plentiful and wages are rising.
- Labor market tightness High quits usually mean employers must compete harder for talent.
- Wage pressure signal More quitting often leads to higher wage growth as firms raise pay to retain workers.
- Recession signal The quits rate typically falls sharply before or during economic downturns.
Key Insights
- The quits rate peaked during the post‑pandemic labor boom and has since normalized.
- A falling quits rate can indicate reduced job mobility or weakening demand.
- Quits are especially important in service industries, where turnover is highest.
Source
U.S. Bureau of Labor Statistics (BLS) / FRED