Wednesday’s Fed decision was largely unsurprising. But the most important data point of the day came long before the Fed decision. The latest JOLTS report showed the lowest levels of quits since early 2018 when Core PCE inflation was around 2%. This is an interesting data point because the quit rate has tended to be a good measure of labor market tightness. As the following chart shows the quit rate tends to lead hourly earnings. The basic logic is that quits are indicative of how much negotiating power workers have. When they are quitting they’re exercising their power to leave one job for another without worry. ... (full story)