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Why Rising 'Quit Rate' May Not Be A Good Sign for the Economy

<p>More Americans are feeling confident enough to quit their jobs. That may not be a good thing.</p>

The latest monthly government data show the so-called quit rate has been rising steadily as the job market continues to improve.

Some economists think that’s a sign the recovery is finally picking up momentum because, the theory goes, workers are getting confident enough to take on the risk of changing jobs, or leaving the work force altogether.

Here are some reasons why that may not be the case:

  • While more workers are quitting, employers haven't picked up the pace of job creation as quickly. Four years after job creation bottomed after the Great Recession, the number of job openings is still well below the same point in the recovery from the 2001 recession.
  • Many of the jobs being created demand workers with specialized or advanced skills that companies are having a hard time finding. Those who don't qualify are having an even harder time finding work.
  • The quit rate is getting a boost from the new health-care law, which is freeing millions of workers who went to work every day just to get health insurance.
  • Lastly, much of the job growth since the recession ended, for example, has been in low-paying industries like retailing, food service and hotels, where turnover has traditionally been higher.