The number of people quitting their jobs in February outnumbered the amount of workers that were laid off by companies for the first time since this economic recovery began, a sign that consumer confidence may be higher than investors currently believe.
Fifty-one percent of all job separations were due to workers quitting, up from 49.8 percent of so-called separations in February, according to the government’s Job Openings and Labor Turnover Survey. This is the first time quitters (presumably confident they will find another job) were in the majority since September 2008. The recession officially endedin June 2009.
“Quits go hand-in-hand with consumer confidence and for the first time of the recovery, quits represent a greater percentage of total separations than do involuntary layoffs,” wrote Nicholas Colas, chief market strategist at ConvergEx Group, in a note to clients that broke down the data. “Careful analysis of February’s JOLTS data leaves us scratching our heads and hoping March was an anomaly.”
Stocks and commodities got rocked earlier this week after the government said Friday that just a measly 120,000 jobs were created in March, well below expectations. The report caught investors off guard who were getting used to numbers indicating a steadily improving jobs picture.
“The March report seems to be widely accepted as a one-off,” said Michael Murphy of hedge fund, Rosecliff Capital. “I agree with the conclusion that consumer confidence is improving.”
So-called quits jumped 9 percent over February 2011, pushing the number of voluntary departures into the majority, according to the JOLTS data.
To be sure, strong signs of hiring are not readily apparent yet. Yahoo just announced the layoffs of 2,000 workerslast week. ConvergEx also pointed out that 3.7 million people are still fighting for every single available job, a figure that is still near the recovery lows.
“There nonetheless remain barriers to stronger job creation, including the reduction in labor mobility stemming from the decline in home prices, which is causing ‘house lock’ for households that would otherwise be able to uproot themselves to a location where job opportunities are greater,” said Tony Crescenzi, market strategist and portfolio manager for Pimco. “For example, they could move to localities benefiting from the energy boom in the United States.”
Still, if history is any guide, these confident quitters could be on the move, foreshadowing a better job picture for this Spring.
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