Chart of the Week: Voluntary Departures in the Job Market

The chart below displays the portion of unemployed people who voluntarily left their previous job. As can be seen in the chart, a declining trend usually coincides with an economic downturn (the gray bars indicate recessions). This is due to the fact that during economic downturns, individuals know that other employers are likely not hiring, so they hold on to the job that they have. On the other side of the coin, an upward trend can be viewed as a positive sign of confidence in the job market, as workers feel confident enough in the economy to quit their job and pursue higher quality employment.

Chart Voluntary Departures in the Job Market

The U.S. economy is currently in one of the longest-lasting economic expansions in U.S. history, and the proportion of voluntary departures remains at post-recession highs, continuing to increase at a high rate. This is a confirmation of the recent strength that we have seen in the employment market. However, one thing that we are watching is that generally a strong run-up in the voluntarily unemployment rate has coincided with a recession in the coming years.