December 13, 2000 (The Editor’s Desk is updated each business day.)

Job leavers not a good gauge of worker confidence

Although some use the number of unemployed who voluntarily left their last jobs as an indicator of workers' confidence in the labor market, one should question how appropriate that use is.

[Chart data—TXT]

First and foremost, unemployed job leavers may not be a good indicator of total job leavers. The vast majority of job leavers may never pass through the interim stage of unemployment—it is likely that many wait until they have found another job before they jump. Others quit for quite different reasons: family obligations or dissatisfaction with their jobs, for example.

The use of the job leavers' share of total unemployment is an even more problematic barometer of workers' confidence. Because job leavers are such a small share of the unemployed—just 13.3 percent in 1999—any change in their share can largely reflect declines or increases in the other categories of unemployment. Job losers, in particular, make up the largest share of unemployment and are the most cyclically sensitive.

The data in this report are from the Current Population Survey. See Issues in Labor Statistics (Summary 00-17), "Unemployed Job Leavers: A Meaningful Gauge of Confidence in the Job Market?" (PDF 37K) for more information.