In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the labor turnover rate.
- If people stay put in one job then they are less likely to seek out a new residence. In recent years, Americans have been less mobile largely because of a lower job turnover rate. However, the number of new job openings and new quit rates has been slowly rising. The rise in quit rate in particular is a good sign regarding the economy and portends well for home sales. Most workers would only quit if they have a better job lined up.
- A total of 2.4 million workers quit their jobs in December, a steady rise from the cyclical low of a 1.6 million monthly quit rate in 2009. The increase in the quit rate is being driven by the general upward trend in job openings. In November and December, there were 4.0 million new openings in each month, compared to 2 – 2.5 million openings several years ago. There is still further room for improvement in the quit rate, however.
- The construction industry is experiencing a rise in job openings but with no meaningful change in the quit rate. That’s a good thing as more construction is needed in the homebuilding industry. Aside from the difficulty of obtaining construction loans by small local homebuilders, the difficulty of finding skilled construction workers has hindered expansion in new home construction. At least 1.5 million new housing starts are needed this year, but only 1.2 million may be possible due to the above mentioned reasons. Less than a million new housing units were added last year, which was insufficient and led to a housing shortage.
- The Winter Olympics remind us that Russia is a vast territory. This was not always the case. Around the time of Manifest Destiny in the United State and the extension of U.S. territory to the Pacific Ocean by going west, Russia also had its Manifest Destiny of reaching the Pacific Ocean, though by going east. Russia not only reached the Pacific Ocean, but claimed Alaska first. All this was accomplished by liberating Russian serfs, which allowed them to quit working for their masters (at about the same time as Lincoln’s Emancipation Proclamation speech). Many former Russian serfs then chose to participate in the Russian Manifest Destiny with some even reaching Alaska. We should be ever grateful that more people around the globe have the freedom to quit old jobs in order to seek out better opportunities.