Ditching your job, spouse, and budget: Why it's great news for the economy
More Americans are ditching their spouses, their jobs and their budgets. And that could actually be a good thing, as it may signal the economy is on the up-and-up.
The number of people quitting their jobs has been on the rise, with about 2.4 million people leaving their jobs in December. And in November, the percentage of people choosing to leave their positions - the so-called “quit rate” - hit 1.8%, its highest point so far in this recovery, according to the Labor Department. That's up from a September 2009 low of 1.2%.
Related: More Americans are throwing in the towel and that's a good thing
“The quit rate has always been viewed as a leading economic indicator for jobs," says John Silvia, chief economist at Wells Fargo. "The concept is if people are willing to leave their job they must see their circumstances better somewhere else.”
It’s not just jobs. People are also more willing to leave their spouses. In 2012 the number of Americans getting divorced rose for the 3rd year in a row, according to U.S. Census Bureau data, after plunging to a 40-year low in 2009. During the recession, tough times were believed to have kept unhappily married couples from selling homes, splitting up businesses and paying lawyers. But an improving economy along with rising home values and stock prices, have helped turn that around.
And 2013’s wealth gains could mean more spending from consumers ahead.
“I think it is a story for stronger consumer spending in 2014 and even into 2015," says Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch. "There is a bit of a lag – people have to believe that the gains in wealth are permanent, and they have to then react in changing their consumption behavior in reaction to that improvement in wealth.”
Related: Why last year's home price gains will bring the consumer back in 2014
We may already be seeing that change. Americans borrowed $241 billion more in the last three months of 2013 compared to the prior year, according to the NY Federal Reserve, amounting to the largest increase in consumer debt since just before the recession started in 2007.
Running up your credit card could be bad news for your budget, but that money still flows into the economy, boosting it, and in a way, helping us all out.
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