WASHINGTON – The proportion of American workers who quit their jobs in May reached the highest level in 17 years, a sign that more people are confident they can find a new job, likely at higher pay.
Businesses also advertised fewer jobs in May than the previous month, but the tally of open positions outnumbered the ranks of the unemployed for only the second time in the past two decades, the Labor Department said Tuesday.
The figures reflect a strong job market driven by optimistic employers seeking to expand their workforces. Last week's jobs report showed that businesses hired workers at a healthy pace and the unemployment rate remained very low, at 4 percent.
The proportion of workers quitting their jobs reached 2.4 percent in May, the highest level since April 2001. That's a sign of a strong job market because workers typically leave jobs for a new one that pays more. Workers who switch jobs see larger raises than those who don't, government data shows.
There were 6.64 million available jobs in May, down 3 percent from April's figure of 6.84 million, which was the most in the nearly two decades that records have been kept. At the same time, there were just 6 million unemployed people in May.
Nick Bunker, an economist at the job-listing website Indeed, calculates that there are now just 0.91 unemployed workers for each available job, also the lowest on record.
The need to compete for such a small pool of workers should force companies to raise pay in order to fill their open jobs, yet pay gains remain modest.
In June, average hourly earnings rose just 2.7 percent compared with a year earlier. That remains below the roughly 4 percent annual gains that are typical of a healthy economy.
Faced with more open jobs than there are unemployed workers, businesses are becoming a bit less selective in their hiring, said Josh Howarth, president of the mid-Atlantic district for staffing firm Robert Half International.
“Companies are slowly but surely realizing that they have no choice but to be more flexible,” he said. If an applicant fits with a company's culture and is highly motivated to learn, businesses are now more willing to train new hires to help them gain needed skills.