A Closer Look

Job Openings and the Beveridge Curve in US – It shifted further outward during and after the COVID-19 pandemic

What are job openings?

Using a sample of 16,000 employers, the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) measures the number of people who have left their jobs.

JOLTS also counts the number of positions for which employers are actively recruiting and would start within 30 days of hire. The number of unfilled jobs is a measure of the unmet demand for labor. The ratio of the number of unemployed per job opening is a way to gauge the strength of the job market; the lower this ratio, the closer the economy is to maximum employment.

What is the Beveridge Curve?

Named for William Beveridge, a 20th-century British labor economist and politician (though he apparently never drew it), the Beveridge Curve charts the number of job postings (as a percentage of all filled and unfilled jobs) against unemployment rate. The Bureau of Labor Statistics updates the chart monthly here. The line generally slopes downward because a higher rate of unemployment usually coincides with a lower rate of vacancies, since there are more people looking for jobs.

Outward shifts in the curve (that is, up and to the right) show a given level of job postings is associated with higher rates of unemployment. They are seen as indicators of unwelcome change in the labor market—an increase in mismatches between the skills of workers and the demands of employers, for instance, or a reluctance of jobless workers to take available jobs. The Beveridge Curve did shift outward following the Great Recession. It shifted further outward during and after the COVID-19 pandemic; in other words, employers found it harder to hire at given rates of unemployment than they had in the recent past. When the unemployment rate fell to 4.2% in November 2021, the job openings rate was 6.6%. In September 2017, when the unemployment rate also hit 4.2%, the job openings rate was 4.1%.

Chosen excerpts by Job Market Monitor. Read the whole story @  How does the Fed define “maximum employment”?

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