Why Job Openings Are Surging, Even With So Many People Out of Work
Odd Lots
Bloomberg
4.4 • 1.6K Ratings
🗓️ 29 November 2021
⏱️ 50 minutes
🧾️ Download transcript
Summary
Normally, economists expect a somewhat stable relationship between job openings and the unemployment rate. More job openings = more people are employed. Lately, however, the shape of this relationship has changed. Job openings are absolutely soaring. And yet total employment in the economy is well below pre-pandemic levels. On this episode, we speak with Thomas Lubik, a senior advisor in the Research Department at the Richmond Fed, who has been researching and writing about this unusual state of the labor market.
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| 0:54.4 | Hello and welcome to another episode of the Adlots podcast. I'm Tracy Alloway. |
| 0:59.2 | And I'm Joe, wasn't all. So, Joe, I know we've been spending a lot of time on the question of inflation |
| 1:07.3 | and whether or not it's transitory. But I feel like a lot of that discourse is sort of happening |
| 1:14.0 | at the expense of a greater focus on the labor market. And I know that sounds like a weird thing |
| 1:20.0 | to say. But if you think that what the Fed is saying right now is that they're going to keep rates |
| 1:25.0 | very, very low until the labor market fully recovers or recovers even more, then really |
| 1:32.1 | we should be digging into the labor market and what full employment actually looks like. |
| 1:37.5 | Right. And that is, I mean, I think there's two questions or there's a million questions. But |
| 1:41.8 | A, as you say, what does, quote, full employment, unquote, our maximum employment, which the Fed |
| 1:48.4 | is established as a precondition for rates lift off? What does that look like? That's one thing. |
| 1:52.6 | And then two, why have we not seen faster job market growth? And that seems like a funny question |
| 1:58.6 | asked because the labor market growth has been incredibly fast since last year. Nonetheless, |
| 2:04.8 | we do seem to be in this weird mismatch where there's lots of job openings and lots of people |
| 2:09.8 | who are not employed. And why haven't they? Well, what are the reasons that people who left the |
| 2:16.4 | labor force a year ago haven't come back yet? Right. This is the mystery of the labor market at the |
| 2:22.8 | moment. So on the one hand, unemployment is higher than it was before the pandemic. I think we're |
| 2:29.1 | still something like four million jobs short of where we were back in February 2020. And if you |
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