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OpenQ : 7
Why does the Federal Reserve watch how many Americans quit their jobs?
On 3 November the US Bureau of Labor Statistics reported that 3.4 million Americans quit their jobs in September, 321,000 more than in August. The quits rate rose to 2.1% of workers, its highest since June 2025. Hotels and restaurants made up 197,000 of the rise, and quits there jumped from 3.6% to 5.0% of staff in a single month. Employers held 7.5 million jobs open on the last day of September. The Bureau treats the quits rate as a gauge of whether workers are willing and able to leave. The Federal Reserve reads the same number with a different question in mind. It wants to know whether workers can push up their pay.
In the United States the quit is the main way a worker bargains. Only 5.9% of private-sector workers belonged to a union in 2025, so most have no contract and no one to sit across the table for them. A worker who wants more money finds another job and leaves, or tells her boss she will. The threat works when jobs are easy to find. In September there were 7.5 million openings and 7.1 million unemployed people, a little more than one job for each person looking. Every quit leaves a firm with a post to fill, and the firm must pay to fill it or pay to keep the people who stay.
Workers have a reason to look. Consumer prices rose 3.7% in the year to September, up from 3.4% in August. Gasoline rose 9.1% in September alone and made up more than half of that month's rise. Average hourly pay rose 3.1% in the year to October, to $38.00. Prices have outrun pay, and fuel accounts for most of the gap. Leave out food and energy and prices rose 2.6%, slower than wages. A cook who leaves one kitchen for a better rate in the next street is trying to win back what she lost at the pump.
The Fed has already moved. On 16 September it raised its target rate by a quarter point to 3.75–4%. On 28 October it held the rate, but two of the twelve voters wanted another rise: Governor Lisa Cook and Beth Hammack, president of the Cleveland Fed. The statement said that inflation "remains elevated" and closed with a promise: "The Committee will deliver price stability." A higher rate does not lower the price of oil. It works through credit. Firms that borrow to grow slow their hiring and post fewer jobs, and with fewer openings a worker who quits has fewer places to go.
Kevin Warsh, who took the chair in May, argued in the Wall Street Journal last November that the Fed should give up the belief that inflation comes when the economy grows fast and "workers get paid too much." Government spending and money printing cause inflation, he wrote. The Fed's October statement says nothing about wages and blames no one. But the tool it has used reaches the labour market and leaves the gasoline price where it is.
The case for a wage push rests on thin evidence. One month of quits, most of them in kitchens and hotels where staff turn over fast, does not make a trend. Layoffs fell to 1.6 million in September. In October employers added 165,000 jobs and the unemployment rate held at 4.1%, but the number of people working part time because their hours were cut or they could not find full-time work rose by 339,000 to 4.8 million. The figures point both ways.
The OpenQ
The Bureau publishes October's quits on 1 December, eight days before the Fed's next decision on 9 December. If quits keep rising, workers may be starting to win back what fuel took from them. If the Fed raises rates again first, they will have fewer jobs to move to. The open question for the coming months is whether American workers can use the quit to close the gap between their pay and their prices, or whether the Fed raises rates in December and narrows the market in which they bargain.
Think About
The Bureau counts a quit as a sign of a worker's freedom to leave a job. The Fed counts the same quit as a sign that the labour market is running hot. Nobody who quit a kitchen in September chose the war that raised the price of gasoline. When prices rise faster than pay, someone carries the loss. Should a central bank treat a worker's power to walk out as a risk to manage?
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