The monthly jobs number that comes out on the first Friday of every month is a net number. That means it accounts for all of the hiring that happened last month, minus all the layoffs, retirements and people quitting their jobs.

There’s always been a certain amount of churn in the job market. But when the pandemic came along, it didn’t just stir the pot — it shook it vigorously, as people decided to switch careers or take advantage of labor shortages to quit and find a job that pays better. And now, there are signs that all the churn in that pot is starting to settle.

Take layoffs, for example. While a lot of big tech companies have been announcing layoffs recently, the overall number of layoffs is still well below pre-pandemic levels, by several hundred thousand every month.

“There’s not a whole lot of firms that want to be laying people off, because it’s so hard for them to hire,” said Peter Orazem, an economics professor at Iowa State University.

But layoffs are not the biggest factor in labor market churn. A bigger factor is the number of people quitting their jobs. Right now, quits are well above pre-pandemic levels, by hundreds of thousands a month. That’s the sign that there’s a lot more churn happening in the labor market than there was before the pandemic.

Companies used to have to assume about one in five of their employees would quit every year, said Caitlin Duffy, a research director at the consulting firm Gartner. Now, that’s jumped to one in four.

“So, in other words, a workforce of 25,000 employees would need to prepare for an additional 1,000 voluntary departures,” Duffy said.

Duffy said this is the “Great Resignation.” People have been seeking out jobs that give them more flexibility. And as more people started working remotely, employees have more job options.

Higher churn rates are a sign of a healthy labor market, said John Haltiwanger, an economics professor at the University of Maryland.

“That’s often times the way workers move up the job ladder,” Haltiwanger said. “There are earnings gains associated.”

Haltiwanger said job churn can help employers, too. That’s because a worker who moves from job to job is likely to land somewhere where their skills are a better fit, which improves productivity.

“A high productivity business is in part a high productivity business because it attracts and retains good workers, and workers that are well matched to what that firm is trying to do,” he said.

It’s still too early to tell whether the broader economy is benefiting from higher churn rates, said Haltiwanger, since a lot of the upsides of job churn play out over the long-term.

Meanwhile, over the last six to eight months, data suggest the churn rate may have peaked, said Skanda Amarnath, executive director of the advocacy group Employ America.

“We’ve seen that the volume of quits and hires has been going down, from elevated levels, albeit,” Amarnath said.

Amarnath said that’s a sign that churn could be settling closer to its pre-pandemic level, as opposed to a new regime of quitting and hiring.

Before the pandemic, there were a lot of factors causing job churn to decline over the last couple decades, said Kate Bahn, chief economist at the Washington Center for Equitable Growth.

“Things like corporate concentration,” Bahn said. “If companies are bigger, you’re less likely to move between companies. There’s been a long-term decline in worker bargaining power that, I think, also could be reducing job churn.”

And even though labor market forces are on the workers’ side right now, Bahn said there haven’t been any changes to labor market policy that would keep job churn elevated in the long-run.

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