Quit Ratio: A Leading Indicator in Labor Market
It is important to interpret the information content of economic indicators based on whether they are leading, lagging or coincident indicators. Usually labor market indicators tend to lag the economic cycle. However ‘Quit ratio’, indicating voluntary separations are a leading indicator since people willingly quit their job when they have something better lined up or are confident of finding something better…..and this indicator shows the economy bottomed at the end of April and has been consistently improving since, in all geographic parts of the country. (Note – we must fully acknowledge that this indicator might be noisier this time since this was a heath crisis induced downturn). My brief three-pager analysis attached.