The labor market eased in October as both job openings and quits fell (and unemployed rose, which we knew already).
Overall there are now 1.7 job openings for every unemployed worker--down from the peak of 2.0 in March 2022.
Overall there are now 1.7 job openings for every unemployed worker--down from the peak of 2.0 in March 2022.
Here are the job openings and quits rates. Opening remain way above anything pre-pandemic and quits somewhat above pre-pandemic (but there was also an upward trend in quits so not far from that trend).
Here are a range of measures of labor market tightness express in standard deviations away from their pre-pandemic values. (Of course, they may have been tight or loose pre-pandemic or may have trends, so not necessarily a measure of absolute tightness.)
And here is the Beveridge curve. It appears to be shifting down towards where it was pre-pandemic but only very slowly. And possibly a little down and to the right, which is the more normal pattern of falling openings being associated with rising unemployment.
The labor market is turning but *much* less quickly than some were arguing two months ago.
Instead of two more months with a 1m decline in openings we have a 281K increase since the original August estimate.
Instead of two more months with a 1m decline in openings we have a 281K increase since the original August estimate.
Overall these patterns are favorable for inflation moderating. But I don't see how they are--or could reasonably be expected to be--in a place where the labor market was consistent with 2% inflation or even 3% inflation.
It is POSSIBLE that openings and quits continue to fall without rising unemployment. Has been happening. But I think we're much closer to post-COVID steady state than to COVID.
More PLAUSIBLE is that unemployment rises and openings and quits fall. Or that inflation stays high.
More PLAUSIBLE is that unemployment rises and openings and quits fall. Or that inflation stays high.
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