tl;dr: If you care about the prospects for people to get back to work, job openings aren't going to give you the full story

or,

How I Learned to Stop Worrying and Love the Recall Hire

@TimDuy points out here that job openings didn't crash as much as you would have expected given the hit to the economy or the rise in the unemployment rate. https://blogs.uoregon.edu/timduyfedwatch/2020/09/28/bullard-may-be-more-right-than-wrong/

On its face & given our usual lens for viewing these data, job openings & their relationship to unemployment rate, the labor market is fairly strong & there are signs of rising structural unemployment.

But here's the thing: the Beveridge Curve is really about understanding how readily jobless & actively searching works (the unemployed) can flow into an open job.

That's an important question, but it's missing something HUGE these days.

About half of the unemployed are on temporary layoff. They don't search for new job because they've been told they have one to return to. And many of them have been buffeted by generous UI ($600 checks).

When they return to work, the most likely angle is to be recalled.

An employer doesn't need to post an opening to recall a worker. They just recall them.

But that means the Beveridge Curve is matching a measure of demand for workers for fill new jobs w/ a measure of supply of workers who aren't looking for those jobs.

So in so much, we think these workers will be recalled we should look at unemployment ex. these workers and match it with job openings.

There you go. Beveridge Curve looks a bit more sober. The ability of unemployed workers to get new jobs seems in line with previous expansions.

Now Tim looks at his version of the adjusted curve (only permanent job losers there) and sees a bit of a shift out.

That's fair. But it's only one month of data and other shifts out (see last expansion) weren't a sign of rising structural unemployment.

I recommend the new BPEA paper from Gallant et al on these issues. https://www.brookings.edu/bpea-articles/temporary-unemployment-and-labor-market-dynamics-during-the-covid-19-recession/

They make a key point here: the recall rate of temporarily laid off workers is critical for understanding the pace of this labor market recovery.

Sadly, that's a measure we only get a look at once a month. But if the recall rate stays strong, the unemployment rate keeps dropping & workers looking for new jobs don't get more competition for jobs.

If it drops significantly, we're in trouble. https://www.hiringlab.org/2020/09/09/july-2020-jolts/

So in short: keep an eye on job openings and job postings. But know that there are unseen hires happening that are critical for understanding the course of the recovery.