Reading Labor Market Indicators, Quits, Layoffs, and JOLTS Context
JOLTS provides more than job openings and hires. The quits rate, layoff trends, and how JOLTS fits alongside the monthly jobs report make it one of the most information-rich labor market datasets available.
Key Takeaway
The quits rate is the single most important leading indicator of labor market strength, when workers feel confident enough to quit voluntarily, the market is tight. Layoffs are the most important coincident indicator of weakness. Together with job openings and hires, JOLTS gives you a complete view of labor market dynamics that the headline unemployment rate simply cannot provide.
The Quits Rate: Measuring Worker Confidence
Among all JOLTS metrics, the quits rate is arguably the most revealing. It measures the share of employed workers who voluntarily left their jobs during the month. Unlike layoffs (which reflect employer decisions) or hires (which reflect employer demand), quits reflect worker choice, and workers only choose to quit when they feel confident they can find something better.
This makes the quits rate a powerful leading indicator. Workers start quitting more aggressively months before official economic strength is confirmed, and they stop quitting months before official weakness is declared. The quits rate is sometimes called the "take this job and shove it" index, an irreverent but accurate description of what it measures.
The quits rate also reflects wage dynamics. In sectors where workers are quitting frequently, employers must either raise pay to retain staff or accept constant churn and higher training costs. Industries with historically high quits, food services, retail, accommodation, face structurally higher labor costs as a result. Browse industry pages to see which sectors have the highest quit rates.
Quits Rate by Industry, Typical Ranges
The national quits rate masks enormous variation by sector. The table below shows approximate typical monthly quits rates based on JOLTS industry data, illustrating which sectors have structurally high voluntary turnover:
| Industry | Typical Quits Rate | Driver |
|---|---|---|
| Accommodation & Food Services | 4.5–5.5% | Seasonal, low-barrier entry/exit |
| Retail Trade | 3.0–4.0% | Part-time workforce, wage competition |
| Healthcare & Social Assistance | 2.0–2.8% | Credential portability enables mobility |
| Professional & Business Services | 2.0–2.5% | Competitive market for skilled workers |
| Manufacturing | 1.5–2.0% | Union contracts, benefits lock-in |
| Government | 0.9–1.2% | Pension benefits, job security culture |
Approximate typical monthly rates. Source: BLS JOLTS industry series. See industry pages for current data.
Compiled by the " research team.
Reading Layoff Trends
JOLTS layoffs and discharges measure involuntary separations, firings, permanent layoffs, temporary layoffs at the end of seasonal work, and downsizing. Unlike quits, which reflect optimism, layoffs reflect employer-side stress: falling demand, rising costs, or strategic restructuring.
A key pattern to watch: layoffs typically lag economic turning points. In an economic slowdown, employers first slow hiring (openings fall), then reduce hours, then begin layoffs. This means a rising layoffs rate is often a lagging confirmation that a downturn is underway, not a leading warning. By contrast, falling layoffs during a recovery confirm that employers have stabilized, even before they begin aggressively hiring again.
Industry-level layoff patterns are more revealing than national aggregates. A spike in finance or real estate layoffs can signal credit stress long before manufacturing feels it. A spike in healthcare layoffs is unusual and often signals specific policy or reimbursement issues rather than broad economic weakness. See how layoff rates vary across states on our state pages.
Separation Rate Comparison: States
State-level separation rates reveal structural differences in how labor markets work across geographies. States with large tourism and hospitality sectors show high total separation rates; states with dominant government employment show low ones. The following approximate ranges illustrate typical variation:
| State Characteristic | Quits Rate Range | Layoff Rate Range | Notes |
|---|---|---|---|
| High-tourism states (FL, HI, NV) | 2.8–3.5% | 1.3–1.8% | Seasonal spikes; high leisure/hospitality share |
| High-tech states (CA, WA, MA) | 2.2–2.8% | 0.9–1.2% | Competitive wages drive mobility; layoffs tech-cycle driven |
| Manufacturing states (MI, OH, IN) | 1.7–2.2% | 1.1–1.5% | Union contracts reduce quits; layoffs cycle with auto/steel |
| Government-heavy states (DC, MD, VA) | 1.5–1.9% | 0.7–1.0% | Federal job security; pensions reduce mobility |
Approximate ranges based on JOLTS state series patterns. Source: BLS JOLTS. See state profiles for current figures.
Compiled by the " research team.
How JOLTS Complements the Monthly Jobs Report
The Bureau of Labor Statistics releases two major monthly labor reports: the Employment Situation (commonly called "the jobs report") and JOLTS. They measure different things and work together:
- The jobs report (CES + CPS): Provides net job change (payroll employment), the unemployment rate, labor force participation, and average hourly earnings. These are headline numbers that move markets.
- JOLTS: Provides the gross flows underneath the net numbers, total hires and separations, openings stock, and breakdowns by type of separation. JOLTS explains the mechanism behind the jobs report headline.
Example: If the jobs report shows +150,000 nonfarm payroll jobs in a month, JOLTS might reveal that 5.2 million workers were hired while 5.05 million separated, showing enormous underlying churn that produced a modest net gain. Or it might show that openings rose dramatically even though net employment changed little, signaling pent-up demand that will result in faster hiring next month.
JOLTS is released about two weeks after the jobs report it covers, making it a useful confirming or complicating data point for the month's labor market picture. See how national figures have evolved on PlainLabor's national trends page.
State-Level Patterns and What They Reveal
National JOLTS aggregates can mask significant regional variation. State-level data reveals:
- Industry composition effects: States dominated by a single industry (oil in Texas, technology in California, manufacturing in Ohio) show JOLTS patterns that closely mirror that industry's cycle rather than the national average.
- Migration-driven tightness: States receiving large migration inflows (Florida, Texas, Arizona) often show simultaneously high hires and high separations as a newly arrived workforce finds jobs and then moves again.
- Rural vs. urban divergence: Many states contain both tight metropolitan labor markets (high openings, high quits) and slack rural markets (low openings, low quits) simultaneously. State-level data averages across both.
- Seasonal patterns: States with large tourism industries (Hawaii, Nevada, Florida) show sharp seasonal spikes in hires and quits that are predictable and structural, not economic signals.
Browse all 51 state profiles on PlainLabor to see how your state's labor market compares to national patterns.
Putting the Indicators Together: Four Market Signals
Reading JOLTS as a system, rather than tracking any single metric, gives the clearest labor market picture. The table below shows how the four core indicators combine to produce a market reading:
| Signal | Openings | Quits | Layoffs | Hires |
|---|---|---|---|---|
| Tight market | High | High | Low | Lagging openings |
| Cooling market | Falling | Falling | Stable | Closing gap with openings |
| Recession signal | Sharp decline | Falling | Rising | Falling simultaneously |
| Recovery signal | Stabilizing | Recovering | Plateauing | Accelerating |
This framework applies at both the national level and within individual industries. For a deeper dive into how openings and hires interact specifically, see our guide on job openings vs. hires.
Practical Interpretation Tips
When reading JOLTS data on PlainLabor, keep these interpretation tips in mind:
- Use rates, not counts: A 2.0% quits rate means the same thing whether the state has 500,000 or 5 million workers. Rates allow fair comparison across states and industries of different sizes.
- Look for direction, not just level: A quits rate of 2.2% rising from 1.8% signals more confidence than a quits rate of 2.5% falling from 3.0%. The trend matters as much as the current value.
- Compare to sector norms: Government always has low quits; accommodation always has high quits. Compare each industry to its own historical range, not to the national average.
- Watch for divergence: When openings and quits move in opposite directions, openings rising but quits falling, it may signal that workers sense something about the job market that official confidence measures have not yet captured.
- Account for seasonal patterns: Retail, agriculture, and hospitality have predictable seasonal swings. Year-over-year comparisons are more meaningful than month-over-month for these sectors.
Frequently Asked Questions
Why is the quits rate called a "confidence indicator"?
Workers only quit voluntarily when they believe they can find another job, preferably a better one. A high quits rate therefore signals that workers are confident enough to leave the certainty of a current job for the prospect of something better. When the economy weakens and workers fear unemployment, quits fall sharply: people hold on to what they have. Economists treat the quits rate as a leading indicator of labor market health because it captures worker sentiment about future job availability, sentiment that often anticipates official statistics by months.
What is a "normal" quits rate?
Historically, the national quits rate has ranged from about 1.5% to 2.5% of total employment per month in normal economic conditions. During the Great Recession (2009–2010), it fell below 1.5% as workers became reluctant to leave any job. During the 2021–2022 "Great Resignation," it briefly exceeded 3.0% - levels never before seen in the JOLTS era, which began in 2000. A quits rate above 2.5% generally indicates a very tight labor market; below 1.8% suggests workers are hesitant and the market may be loosening.
How do JOLTS layoffs differ from weekly unemployment claims?
They measure different things. Weekly initial unemployment claims count new applications for unemployment insurance, workers who lost a job and filed for benefits. JOLTS layoffs count all involuntary separations regardless of whether the worker filed for unemployment. JOLTS has a two-month lag but covers all establishments; claims are released weekly but only capture workers who are eligible and choose to file. For trend analysis, JOLTS layoffs are more comprehensive; for real-time recession detection, weekly claims are more timely. Together they give a fuller picture.
How does JOLTS complement the monthly jobs report?
The monthly jobs report (from the BLS Current Employment Statistics survey) tells us the net change in employment, how many jobs were added or lost overall. JOLTS reveals the gross flows beneath that net number. For example, if the economy added 200,000 jobs in a month, JOLTS might show 5 million hires and 4.8 million separations, showing an enormous amount of churn beneath the stable-looking headline. JOLTS also shows which industries are driving openings, which informs where the net job gains are likely to come from in future months.
What do rising layoffs in one industry signal for the broader economy?
Industry-level layoff spikes sometimes signal broader stress before it shows up in aggregate data. Sharp layoff increases in financial services or real estate often precede economy-wide downturns, since these sectors are sensitive to credit conditions and interest rates. Technology sector layoffs in 2022–2023 were concentrated and did not immediately trigger broad economic weakness. By contrast, layoff spikes in manufacturing or construction tend to signal that a broader slowdown is already in progress. Monitoring industry-level layoff data, available on PlainLabor's industry pages, provides early warning signals.
Why do some states have consistently higher quit rates than others?
State-level quit rates reflect both industry composition and labor market structure. States with large hospitality, retail, or gig-economy workforces tend to have higher quit rates, these industries have naturally high voluntary turnover. States with older workforces, more unionized industries, or higher concentrations of government employment tend to have lower quit rates. Cost-of-living differences also matter: in high-cost states, workers may switch jobs more aggressively to capture wage gains that keep pace with rising expenses. State-level patterns on PlainLabor show which states have the most fluid labor markets.
Explore the Data
- Browse 51 state profiles - quits, layoffs, hires by state
- Browse 28 industries - sector-level separation and opening data
- National trends over time - how JOLTS indicators have shifted
- Understanding JOLTS data - what each metric measures and how BLS collects it
- Job openings vs. hires - interpreting the gap between demand and results
- The Great Resignation by the numbers - quits wave 2021–2023 analyzed in data
Sources
- Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (JOLTS), bls.gov/jlt
- BLS, Employment Situation Summary (CES + CPS), bls.gov/ces
- Federal Reserve, FOMC minutes and monetary policy reports referencing JOLTS
- BLS Economic News Releases, JOLTS technical notes and methodology
This content is for informational and educational purposes only. Labor market data from BLS JOLTS is subject to revision. This is not financial, investment, or employment advice. Economic indicators should be interpreted in context and in combination. Always verify current figures at bls.gov.
