Workers quit quitting and settled in, after the epic rematching of workers and employers.

By Wolf Richter for WOLF STREET.

Turnover in the labor market is a result of people who quit their jobs, got fired, or retired, or separated for other reasons, thereby leaving behind job openings that employers then attempt to fill with new hires. This churn is constantly going on but morphed into a huge wave in 2021 and 2022, that then settled down in 2024, and has been at normal levels since then.

Voluntary quits declined by 23,000 in August, from the upwardly revised July quits, to 3.07 million workers (blue in the chart). The three-month average, which irons out some of the month-to-month squiggles, dipped to 3.12 million (red).

Quits are the biggest source of labor market turnover, accounting for 60% of total separations. Fewer quits mean fewer job openings left behind that need to be filled and fewer hires needed to fill them.

These stages of turnover in the labor market are tracked by the “Job Openings and Labor Turnover Survey” (JOLTS) by the Bureau of Labor Statistics. The turnover data for August were released today. The data is based on surveys of a large number of business locations. Net job gains, the unemployment rate, etc. for August had already been reported in the August jobs report on September 4.

Layoffs & discharges declined to 1.64 million in August, the lowest since March 2025. Getting fired for a variety of reasons, or for no reason, is a standard feature of the US labor market.

The three-month average declined to 1.71 million. These levels are at the very low end of the range of the prepandemic years.

Layoffs and discharges accounted for 33% of all separations.

Retirements and other separations (including deaths while employed), accounting for 7% of total separations, are only a small factor in the turnover equation.

They rose to 363,000 in August. The 12-month average, which irons out the month-to-month spikes and plunges, rose to 320,000, further climbing up from the low in 2025. The JOLTS data only goes back to 2001, but within that time span, retirements and other separations had booked a record low in 2025.

Job openings fell by 256,000 in August from the upwardly revised July openings, to 7.08 million. The three-month average declined to 7.20 million.

Compared to a year ago, job openings rose by 160,000.

The data for job openings is based on a survey of HR departments at 21,000 business locations, not online job postings.

A job is “open” only if it meets all three conditions:

1. A specific position exists, and there is work available for that position.
2. The job could start within 30 days.
3. The employer is actively recruiting workers from outside the establishment to fill the position.

Excluded are positions open only to internal transfers, promotions, demotions, or recall from layoffs; positions for which employees have been hired but have not yet started; and positions to be filled by employees of temporary help agencies, employee leasing companies, outside contractors, or consultants.

The number of hires to fill fewer left-behind slots rose by 46,000 in August from the upwardly revised July figures to 5.19 million.  The three-month average dipped to 5.22 million.

Nearly all of these 5.19 million hires in August filled slots left behind by previous separations (quits, layoffs & discharges, and retirements & other separations). The number of “Hires” does not speak to job creation; the nonfarm payrolls report on September 4 already addressed job creation in August.

The low number of quits, layoffs and discharges, means that the number of left-behind job openings is also low, and fewer hires are needed to fill those openings.

This means that labor market turnover has normalized from the chaotic churn in 2021 and 2022, driven by a massive wave of quits, which had reshuffled the labor force and led to a rematching of workers and employers that was very costly for employers at the time, triggered large increases in wages for workers at the time, but likely resulted in a better overall fit between workers and employers.

This calmed-down turnover is not a sign of a weak labor market but of a settled labor force that is more productive for employers, after the massive and costly churn of 2021 and 2022.

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