Why Job Openings Are Surging, Even With So Many People Out of Work

on the labor market. And I know that sounds like a weird thing to say, but if you think that what the FED is saying right now is that they're going to keep rates very, very low until the labor market fully recovers, or recovers even more than really we should be digging into the labor market and what full employment actually looks like, right, and that is I mean, I think there's two questions, or there's a million questions, but a as you say, what does quote full employment

unquote our maximum employment which the FED is established as a precondition for rates liftoff, what does that look like? That's one thing? And then two, why have we not seen faster job market good growth? And that seems like a funny question to ask because the labor market growth

has been incredibly fast since last year. Nonetheless, we do seem to be in this weird mismatch where there's lots of job openings and lots of people who are not employed, and why haven't they Well, what are the reasons that people who left the labor four US a year ago haven't come back yet? Right? This is the mystery of the labor market at the moment. So, on the one hand, unemployment is higher than it was before the pandemic. I think we're still something like four million jobs short of

where we were back in February. And if you look at, you know, the line of where we would have been had the pandemic never actually happened, I think we're about seven million jobs short. And Yeah, at the same time, you have a lot of companies, and you know, we've spoken to at least one of them on the show talking about the idea of a labor shortage, that they can't get the right workers in the jobs that they

have open at the moment. And it turns out there's really a perfect economic principle to capture this sort of tension between job openings and the unemployment rate, and that is something called the beverage curve. Yeah, you had a great post on this recently. Thank you. Um So, the beverage curve is basically the relationship. That's all I wanted you to say, Joe, Yeah, I just I just wanted to kick it back to you. Thanks. It's the relationship

between the unemployment rate and the job opening rate. And you know, normally, if you look at the beverage curve in a usual business cycle, it would be expected to move in a sort of counter clockwise loop. So as the unemployment rate initially jumps, you would expect the rate of job openings to stay very small and then sort of gradually recover and start moving to the left as the economy healed. Uh, spoiler alert. That is not what

has happened in this particular business cycle. Instead, we've seen something that is normally a curve. You know, the clue is in the name, the beverage curve. It's basically morphed into an up and down line, meaning that unemployment basically isn't moving even as the number of job openings is going higher and higher and higher. So something really appears

to have changed in the labor market here. And I am pleased to say we have the perfect person to discuss all of this he's actually the author of a recent bulletin on the beverage curve on this exact topic, we're going to be speaking with Thomas Lubeck. He's a senior advisor in the research department at the Richmond fed So, Tom, thanks so much for coming on. Okay, thanks so much for having me, and thanks for the kind of introduction. Yeah,

so I was really interested in this paper. Maybe just to begin with, you could lay out, you know, what is the beverage curve and how would you expect it to act in normal times. So I think you've already introduced the concept of the beverage curve perfectly, So just to restate what you discussed, the beverage curve is the relationship between the unemployment rate and the job openings rate. So job openings are open positions that businesses um want

to fill and looking to hire form. And this relationship is it's a negative relationship. So when the unemployment rate is high during a downturn, job openings are low because well, the economy is um not working very well and firms are reluctant to hire new workers because of the uncertainty of how the economy might improve. But as the economy

improves um and the downturn turns into an upturn. The unemployment rate falls because the job openings are being filled, and as the economy improves, firm post more open positions, so the job openings rate rises as the unemployment rate falls. And this is what we see in every recession, and the beverage curve basically describes this relationship. So you can think of it as a scattered plot of monthly data on the unemployment rate and the job openings rate, and

they line up nicely around this downward sloping beverage curve. Now, what is absolutely striking in the COVID recession and COVID recovery is that the beverage curve that we've seen in the last twenty years pre COVID has changed dramatically and in two ways. It has shifted outward, and it is

also has become much more steep. So the outward shift of the beverage curve um that occurred right after the COVID shock hits, so essentially starting in March two thousand, twenty April, when the unemployment rate shot up um and then declined very very rapidly once the economy worked itself through the initial COVID shock. So, but this is connected with an outward shift in the beverage curve in the

following sense. So, at any given unemployment rate in normal times, um, you can derive and shop openings rate that is required to maintain a certain employment level or unemployment level. Now, during the first few months of the COVID shock, the unemployment rate stayed high but declined, but so did the job openings rate. But the job openings rate was at a level that actually we hadn't seen before for this

given unemployment rate. And this has been quite striking. I wanna, obviously why dive into why this relationship is the way it is right now. But actually before we get to that, I actually have a more straightforward question, which is how is the job openings rate derived? Where does that number come from? Because with the unemployment rate, you know, you imagine you ask a thousand people what percentage of you want a job and what don't have one now, etcetera,

you can come up with one. How does how do they determine the job opening trade? So it comes from the so called trolls data, So the shop openings and Labor Turnover survey that the Borreau of Labor Statistics UM conducts and they ask businesses a set of questions where they really dig deep into what a job opening is. Search job opening is defined, it's a position that is immediately ready to be filled, for which there's funding, and

for which firms actively engage in recruiting efforts. And the survey goes out to businesses and they report their shop openings to the Borough of Labor Statistics and this then ends up as the shop openings right, so at both total level, but also I'm relative to UM the labor force for instance, So I'm gonna jump to UM. The next obvious question that Joe just kind of foreshadowed, but

what do you think is happening here? So you know, you mentioned this is sort of an unprecedented move in a relationship that has historically held across many different types of recessions in many different countries. What's your theory about

what's happening? So, as you know, we've seen historically high shop openings rates, so UM we hit seven percent in truly has come down a little bit from this and the shop openings the level is about ten and a half millions when the unemployment total unemployment is around seven millions, so there's a huge gap, and this is the highest gap ever measured. So at this point, I think it is fair to say that we don't have one clear explanation of why the shop openings rate is so high.

I think it's a combination of variety of things. We have seen even before COVID um relatively high shop openings rates. So even before COVID, we heard stories from all reports from the business sector about about mismatch if you will, that firms find it difficult to hire the right workers because they don't have the right skills. Even if they interview, they don't show up for um, the beginning of um of a job, and all kinds of things that we've

heard anecdotally from firms. Now, in a sense, the COVID shock scaled this problem up, so we know that the economy shut down, the positions were still there. Funding for these positions was there through various programs, the Payment Action Program p p P first and foremost, and aggregate demand held up incredibly well during this recession. So all of these signs point towards a very strong demand for labor that shows up in the job openings rate. Now, the

question is why is this so outsized? And I think one of the answers to this question is that there is a sense in amongst businesses that the labor market is changing, um that the requirements and workers is changing, and that in a way, businesses post open positions preemptively. So one aspect of this is the high quid rate.

So we've seen historically high quid rates. So in the quid rates, they also come from the UM Job Openings and Labor Turnover Survey and they represent voluntary quids of workers, presumably into other positions. So there's a very high turnover in the labor market, a lot of churn. You can think of it this way. So a quit is connected with two shop openings. So if a worker quits to take another position, well that fills one shop opening, but it creates immediately a new shop opening for the firm

that was left behind, so to speak. And firms businesses may respond to this preemptively and post open positions because there is concerned that they may not find the right workers or replace them. So this actually sort of gets back to my previous question, which is if that's the case as you describe, okay, firms are anticipating churn, they're

anticipating quits. Is the nature of posting job openings? Has it changed such that at least part of the mismatch or part of the changing shape of the beverage curve is not simply a relate ship ship between employers and employees changing, but a reflection at least in part of the nature of how and when businesses say they're looking for an employee, and there is certainly it's a very good points so and this is certainly part of the story.

So a lot of chop search, I would say, the majority, but now has no moved online, which also has reduced the cost of finding workers, right, And I think this is also one of the drivers. And this is actually what all economic models would tell us that if the cost of UM searching for workers of chop search UM is UM is slower than more vacancies, more open positions

are being posted because it simply is less costly. So that makes me wonder, I mean, when I think what people look at these curves or when they look at these mismatches, and I my sense is that there's a lot of reasons, but we'll get into that. We look at these mismatches, and we say, oh, maybe it's people have all these savings that they're not rushing back to work. Maybe it's labor and gil's mismatch. Maybe it's unemployment insurance.

Maybe it's people lack childcare. Maybe it's people don't want to go back into an office for fear of risking COVID. At some element, there is also just as change, as you point out being able to post a job opening online, at least some of it might just be that, all all things equal, firms maybe posting more openings today than they would have had similar economic condition to say occurred

in the nine Yes, I think that's a very fair point. So, but to be clear, so in a way, but it's nice about this beverage curve idea that both the job openings rate and the unemployment rate are normalized by by the labor force. So essentially you can make this discussion about labor force participation, which we know has declined and is much below ware and it was a pre COVID, but the beverage curve essentially nets out label first participation effects.

As we observe this relationship sort of breaking down, and and maybe it's because of this job creation condition that you just described, you know, the idea that employers are expecting churn, and so they're posting more and more potential jobs on various websites to sort of make up for that. But we still we still like come back to this problem or this issue of employers and employees struggling to

match with each other. And I'm wondering, do you see that more as a problem of some sort of match inefficiency the way we're assigning jobs or hiring people for jobs, I should say, is just some are more inefficient than it used to be. Or is it that we're seeing more competition for workers and people are having to our employers are having to compete for a sort of smaller potential pool of employees. That's a very good point. I

think it's both of these factors. So when we start back the club to the financial crisis, and this is when when I became first interested in the beverage curve. So during the financial crisis, the unemployment rate h ten percent, stayed around between nine and ten for a while and would not come down for a substantial period of time, and then it declined rapidly as the economy was working through this this unemployment overhang. But at that time we

were talking a lot about precisely this mismatch phenomenon. So the mismatch phenomenon describes the idea that, well, simply speaking, that workers and firms don't find each other um on the matching market. So this could have geographic reasons. During the financial crisis, some regions in the United States were hit harder than others, which has an implication for job openings and open positions. There was a sexual change away

from construction manufacturing to healthcare other services. So all of these issues combine into mismatch, the idea that workers and firms don't find each other. Now we see the same phenomenon, if you will, in the beverage curve, in the sense that this beverage curve relationship has shifted outward in the in the scatter plot sense. So in other words, for a given unemployment rate, now many more job openings need

to be posted to reduce the unemployment rate. So this is I would say, prima fasci evidence that yes, there is mismatch going on. Now, the question is is this the same time type of mismatch that we've seen in the Great Recession. And I would argue likely not, because COVID hit most of the US in a similar way.

Now we don't see many regional differences, and we know that the service sector was hit much harder by COVID than UM the financial services sector, for instance, So there may be some aspect to this, But I think overall speaking, I think there is an aspect of mismatch going on that we don't quite fully understand yet, which is connected to this this NEXUSUS Tracy mentioned of workers being reluctant to return to work, childcare issues, COVID is still still around,

and also potentially skills changing skills requirement. So but in that sense, I think I would argue that what we've seen in the second half of the last decades, so between two thousand and fifteen two thousand and twenty, that this may have been more of an outlier than was acknowledged at that time. So we saw the labor force participation going up despite all these demographic changes, so it brought in a lot of people into the labor force,

and this has disappeared through COVID. So in terms of labor force participation, I would argue that we are now almost back to the pre two thousand fifteen trend based on cham with demographics. So long story short, I think there's a lot going on in the labor market that we don't quite fully understand yet, um simply because we are lacking the micro data as of this point. And the beverage curve just gives this overall snapshot that something is going on in the labor market, a structural change.

So as you mentioned, I mean, if you look and I'm looking right now at b LS dot gov their beverage curve, they have a nice chart of it over a different time period. And as you mentioned, we did see a shift outwards in the beverage curve after the Great Financial Crisis, so that was already a bit of a change. And then of course this current shape of the beverage curve, it's blown out way past that. So

it's clearly to a very uh high degree. And one of the possibilities is the so called mismatch and maybe that's geographical. Some people think, uh, this is a very popular theory after the GFC that it had to do with skills or the lack of skills or mismatch. But

you know, you mentioned construction and so forth. But on the other hand, you know that led to people arguably prematurely thinking that we had hit maximum employment or that you know, at this point there's nothing more that monetary policy can do or fiscal policy because at this point we just need to upskill workers, etcetera. Instead, what we saw is that the unemployment rate just kept going down. It was slow, but I think we got down like

three point four percent prior to COVID. So what is in your view what are in your views some of the policy up shots from this s idea of mismarriach What what is? What is mismartrich define however you want to define it? Tell policymakers. So I think my preferred angle in terms of thinking about mismatches is really a skill story. So does the workforce has the right scat of set sort of skills for the requirements that firms

in the changing economic environment want to have? And of course there's a lot of research shots of policy discussions about it, but I think the overall sense is that the labor force is lagging behind this in terms of um stem skills. Um if you will, no, but do your to your point. I think it is also fair to say that we work caught by surprise how well the labor market performed UM in the second half of the last last decade, which brought in a lot of

people from the from the sidelines. So and in that sense, yes, growing economy UM growing. I don't above trend can bring in additional workers from the sidelines. But much of this UM, I think was driven by an expansion in services, a shift away from manufacturing to some extent, healthcare sector expanded. So I think there is a structural reason for this.

Just to play devil's advocate for a second, could you flip that slightly and argue that maybe the labor market or the economy isn't offering up the type of jobs

that people want. And you know, I say this after the experience of the pandemic, when we had a lot of anecdotes about people who simply didn't want to go back to their service jobs and maybe didn't have to because they had higher, you know, unemployment payouts and maybe they were day trading game stop stock in their basements or cryptocurrency or whatever and didn't feel as much pressure to go back to a job that they didn't like

or value. Is that something that's potentially on your radar here it is because it is connected to UM well, the outside option of the workers, if you will to use the technical term, or the willingness of workers to work in low wage shops, if if you will so, and yes, I mean this is definitely something that we see in the data already that particularly employment in Lesion hospitality in the service sector is lagging much behind the financial services UM sector, for for instance, And there there

are good reasons for this. So all the support programs UM during the COVID shock and the recovery UM certainly changed the financial position of workers. There was no need to look for a shop that may not offer the same benefits in the same wage that one could get through the government support program. So now this is starting

to disappear. So to take you up on the devil's advocate question, so I think if we want to rest out the remainder of the slack and the labor market, if you will, so, from the gap between four and a half percent where we are now to below four percent, I think this is probably where it is coming from. But to your point, I think this is certainly an issue that is on the radar, namely in terms of what is maximum employment in this economy. This seems to be the question that the FED. And by the way,

I think it's interesting people should know. We are recording this Monday in November twenty two, and we started recording at nine am, right at the moment literally we started recording right at the moment that it got officially announced that President Biden would be renominating Powell. So, assuming he gets confirmed, this is the question that Powell will have

have to answer. How do you think about this question of maximum employment and this idea of we wanted you know, as you mentioned in the second half of the tens, economists were taken by a surprise by how far how strong the labor market could get, how many people it could bring in, what it could do for labor force participation, how low the unemployment rate could get without triggering meaningful

increase in inflation, and so forth. So on this question of you know, obviously there's some head scratching that's going to happen. The FET is obviously reluctant to put any sort of number on maximum employment. It kind of feels like we'll know when we see a type of thing inherently subjective, but from your perspective, and from your research, how should the FED be thinking about answering that question of what what success on the employment front looks like.

So the Federati surfact stipulates maximum employment UM as the first mend that into FAT has always interpreted this well, first a little bit more narrower and then a broader goal in terms of an unemployment rate that is sustainable without generating additional inflation, and where the labor market and the turn the labor market, very loosely speaking, are in equilibrium.

So when I went to college then graduate school, so we were thinking of maximum employment as an unemployment rate of five percent, which we dropped to four and a half percent in the two thousands. So this unemployment rate tied to maximum employment can change, of course, and in a sense, this is where where we were surprised that the unemployment rate could sustain low inflation rates below four

percent for a very very long time. And I think it's fair to say that this experience of below four percent and employment really informs the current discussion right now. But I think we've the experience of firm the two thousand tents and the recovery from the global financial crisis also taught us that the unemployment rate, the headline unemployment rate, may not be the single best gauge for what maximum unemployment.

Maximum employment means. So for one, I mean it is a survey based measure, so it is measured reliably as much as it can reliably be measured, but it does not fully encompass all of the chop search that is going on. So, and this is why policymakers in my in my reading, have shifted to looking at additional metrics, so the employment population ratio, which may be just as good on a measure of full employment, then the labor force participation rate, as well as O based measures such

as the drop openings in labor turnover survey. So I am inclined to agree with you that we know it when we see it when we have maximum employment. So at this point I think there's still room to go until we hit four pc. No. The flip side of this is, of course, our view of maximum employment was informed by the fact that the inflation rate um stayed well contained above two percent for a long time in

the two thousand tents. So much of the thinking that goes into what is maximum employment is actually related to the inflation rate, because we did see historical episodes where um, when unemployment was below it's its natural rate, if you will, inflation would go up. This didn't happen in the two thousand tents. This kind of leads into something that I wanted to ask, which is, when would you expect to see this competence shan for workers or the sort of

inefficiency in matching. When would you expect to see that feed into wage increases? And is it possible that if we've seen a historic break in the beverage curve, you know, the relationship between the unemployment rate and the job opening rate, then is it possible that maybe we're going to see something vastly, wildly different when it comes to wages. So at this point, we haven't seen much of wage inflation at a level where I think policymakers and economists would

become uncomfortable. So nominal wages have been going up, but not excessively so, and actually to the point that real wages have been falling because of the inflation numbers that we have been seeing. What we do see is some higher wage increases in some sectors um so lesion, hospitality. There we do see higher wage growth, higher nominal wage growth, And we also see the chop switchers, which brings me back to UM the quid rate and the historically elevated

level of quid rate. So chop switchers have seen high wage increases, which presumably is one of the reasons why they switch shops. So but at the same time, we know that the wage data are um lagging behind in the sense that so many wages are determined one year ahead, and now many companies are having wage discussions at the end of the year. So what is the compensation picture going to look like for two thousand twenty two given

the high levels of inflation we have had. So I think going into the next year, UM, I am starting to become a list little bit more nervous that we may see much higher nominal wage inflation numbers. Let me I want to go back to something important and again, uh, this mismatch idea, because ultimately that really is what the

chart is showing us. On some level, the things are very there is some uh, some big change to what extent is these things you know you mentioned for example, and you know numerous policy makers talk about say skills and stem skills and tech skills and coding skills in particular is always being in short supply, and there's probably not a major business in the entire country that doesn't

have numerous job openings for technical skills. But one thing that we did see at the end of the tens in addition to bring some people back into the labor forces, more anecdotal stories about skills training where the company itself would pay for skills training or fund skills training, or also where the companies would hire people who are previously incarcerated and so looking beyond the normal pool of applicants

to bring in people back into the workforce. Should theory has a very sort of positive long term effect to what extent should these mismatches essentially be or can they essentially be dealt with by the market that if you know, FED recognized can recognize the persistence of mismatches, but ultimately, if there are whether it's skills or geography, these are things that employers and employees will ultimately solve if there is a price opportunity there. Yeah, I mean I very

much agree with you on this point. I mean, in the end, these mismatches will be dealt with by um changes and employment relationships and how workers and their employers reorient their relationship. I mean, I think the prime example for this is um working from home on a hybrid working environment, which decouples the location of the business from

the location of the workers. So so the geographic mismatch part of the mismach story I think would probably largely go where because I could, you know, as we're having this interview right now, I mean, I'm sitting here in Richmond, UM and you're in other locations all over the world,

So that part, I think can be mitigated. So one thing, so with respect to the US labor markets, So one thing that struck me and my background is in Germany and growing up in Germany, is the is the lack of apprenticeship programs and on the job training programs, which is very formalized UM and very institutional liced in in in Germany. And you don't see this to the same extent, actually to a much lower extent here in the United States.

So and I think this is one of those labor market policies that UM I think policymakers should try to pay more attention too. I'm under drop training, um upskilling of the worker force and essentially worker training. But I think the broader issue is can we already discern structural changes in the labor market that would completely decouple us from you know, previous working arrangements. And I think the

first signs are there. Um. So, I think the COVID um shock has accelerated this work towards more of the worker as an entrepreneur rather than as a salaried wage employee. So, Thomas, I'm I'm aware that you've been publishing quite a lot at the Richmond FED and I mean you've sort of taken on the very very big questions of the economic experience of the pandemic, including how to actually model um

COVID nineteen and things like that. But what's been the most interesting work that you've undertaken over the past year or two, or perhaps the most surprising thing that you've seen other than the beverage curve of course, Um, yeah, thanks for your kind words. I mean I would have answered the beverage curve because because this is this is

truly striking. I mean I started working on this during the financial crisis, and at that time, the shifts in the beverage curve seemed completely out of this, out of line with historical record and then I just plotted late last year the beverage curve and whoa, suddenly that the change in the beverage curve was even much more dramatic. But in terms of other other wor work. UM. So

one aspect that that occupies my thinking a lot is UM. Well, what we call our star or the natural real rate of interest, which basically anchors almost all of our policy discussions. And what we can say is that the natural real rate of interest, So when all is said and done, the level of the real interest rate that the economy would naturally gravitate towards has declined over the last twenty

thirty forty years. The precise level of where our star is UM, Yeah, there's much uncertainty about this, and this fundamentally informs the policy question. So in the long run, where should a natural normal level of UM policy accommodation or the federal funds rate? But I think we're far away from UM having a good answer to this at this point. What about just this sort of you you know, usefulness of these indicators are star neutral rate, real rate?

You know this is prior to COVID and I always forget which hero was either I want to say chair. Powell gave a speech sort of questioning whether any of this, any of these numbers, what the neutral rate is, that this is really knowable in real time? And I took it to me and that maybe there's just some question about like to what degree should we be using these

to build models that inform policy in real time? How do you feel about the confidence that economists should have in being able to derive a number like our star and actually use it to make a decision from one meeting to the next. Um, Yeah, thanks for the questions. So I mean, as I said, I mean there's much uncertainty about um, the levels of these natural rates, be

it you still in a sort of unemployment bepat our star. Ultimately, think all of the models that we have in mind, and I'm not just thinking about, you know, the academic models that academic economists built, but also the implicit models that policymakers have in their mind. They ultimately come down to the question, what is the long run equilibrium outcome in the economy where we are at maximum employment, where we fit our inflation target, and what the long run

interest rate should be. So and and once you take this issue on board, this immediately leads you to the question, what can we figure out what our star or you star UM is so and and and to be fair, these are fundamentally unobservable, so we have to use some statistical methods technical tricks to tease them out from the data. But I think that they are informative. Nevertheless, so even if it is just that the level that our star is much lower than it was in the ninety eighties,

which puts us into a different policy environment. So just on that note, I have a slightly I guess, strange question. But you know, one of the things that has been repeated in many of our conversations on all lots over the past year or so is the idea that a lot of economic principles that we seem to have taken for granted, actually no one seems to know how they really work. So, you know, something weird is going on with the labor market, something weird is going on with inflation.

I think our star. You know, people have been questioning UM the natural rate of interest idea for a while now. I know you've done some academic work on the output gap, UM not being particularly useful for monetary policy. Is this sort of a moment of doubt for economic researchers, or does it encourage you to, you know, examine these issues

even more and seek out answers. It feels almost like a sort of existential crisis, or at least if you read some of the commentary around higher than expected c p i UM from a week or two ago, it feels like existential crisis for the FAT at least. Yeah, I would not put it in such standard terms. That's fair. I just I gotta ask. Yeah, so in the sense that I think we do have a much better understanding of how the economy works UM compared to forty years ago.

But I think what we've become more aware is that there's much more uncertainty about these unobservable variables. And and and again, going back to the COVID shock, we were hit by an completely unprecedented UM shocked that shut down the economy the economy is worldwide to an unprecedented level. And we've recovered from this incredibly quickly in terms of

the macroeconomic data. And yes, while the beverage curve may look different from what we would have expected had had COVID not happened, UM, it still follows the same underlying principles. So when times are good or improving, the unemployment rate falls, chop openings go up. But what the beverage curve tells us in that sense it is it is you know, a visualization device of the state of the economy. Is yes,

but there's something else going on now. We don't know exactly what is going on, so more research will be poured into it. So when I presented the beverage curve to our internal audience and outside audiences, I introduced it as um chop security for labor economists. So more research needs to be done. But I think overall, our economic models and our economic thinking actually had held up pretty well,

um during the COVID shock. Thomas, it's been great speaking with you, and uh again plug to the beverage curve paper, which you can find on the Richmond Fed website. Thank you so much. Okay, thank you so much. It's a

pleasure talking to you. Thanks Thomas. That was great, So Joe, I thought that was really interesting, and again I think, um, you know all of well, the two major issues inflation and the labor market are of course tied together, but it does feel like the focus of the majority of attention has been on the inflation question, um, and people are only really talking about the labor market insofar as

it might lead to wage increases. So I thought it was quite um, it was quite good to dig into, you know, the beverage curve and a particularly wonky corner of economic research. Yeah, it really is. If anyone who just pulls it up and goes to the BLS beverage

curved chart, you just instantly see how wild. I mean, look like COVID data is going to leave this imprint on all the church that we look at for like decades because it's just so weird, whether it's the surge, the raw surge in the unemployment rate, the pure speed of the bounce back, the collapse, everything is just so weird. But you look at this and it's obviously very different.

And I do think that, like, I don't think there's a totally satisfactory answer yet to why do we seem to have this very robust demand for labor and yet we continue to have, um, this big whole you know, at least five or six million people if you were on the employed than they were a pre crisis. It's

a pretty it still remains a pretty big puzzle. Yeah, and I like to Thomas's description of it as a full employment plan for economists, but I mean on that on that wider point though, I mean the idea that maybe maybe we know more than we did before about the way the economy works, but we sort of don't have a good way of measuring those unknown economic variables

like maximum employment and um our star. I think that's quite maybe that's the way to think about it, Like it's not just that no one knows how anything works anymore, which would be quite frightening, but it's becoming increasingly hard

to um to gauge those particular ideas. Maybe, you know what, while we're here, I imagine some people maybe this is no while we're here, And I imagine maybe some listeners who listen to this episode may work at the FED or something like that, because we had a guest at the Richmond Fed. So I have a request to those listeners, Tracy, you don't like the Beige Book, do you ever? Uh? So, they it's like the regional survey and they always and

um our guests just mentioned it. It's like business leaders said, uh, you know, we're seeing labor market Titan is having trouble hiring this. I want a Beige Book for workers anecdotes of the labor market, but from the from the worker perspective, just asking people questions. Okay, we get the actual data, but talking about what was your experience? What was your experience applying for a job that you're ostensibly qualified for? Did companies actually call you back? Was the description actually

how it was. I think employers are going to get to sort of like give their anecdotal takes that aren't really based in data on like oh, you know, like we can't find the people or the workers aren't showing up after we offer them the job. I think we deserve a Beijing Book from the workers perspective, and I think that might help us answer some of these questions stuff. Anyone who's listening. Maybe we could get some funding for that.

I think that's a great idea. And I mean I want to know whether or not there is a wealth effect, Yeah, greater wealth effects going on from like stock trading from crypto. Yeah. This would be the kind of thing where like instead of just having to speculate, I mean, anecdotes can only go if you go so far. And I think we

have to be careful. And one reason we have to be careful about anecdotes is because you know, employers started calling the labor market tight like fifteen, then we had like five more years of unemployment, right, so you have to be careful of anecdotes. But all of these things like oh, are you taking the time off from work because you want to trade crypto or something like, let's ask people in a systematic manner and have it be something that we record rather than just sort of like

speculate on totally. And I also I also want to see how people react to or what they say about, like the new sort of UM hiring websites and things like that, because I gather it's been it's been a while since I've applied to a job on on one of those um so, thank you Bloomberg. But like my impression of them is that you kind of have to take all these boxes and it can be really really frustrating if like one aspect of your resume is slightly out of line with whatever the request is from the

potential employer or the monster dot conform or whatever. And I suspect that's also frustrating some of these matching efforts. Yeah, totally that again, and that speaks to Thomas's point, which is like, Okay, like these websites have made it a lot easier to post job openings, their behavioral effects on the employment side where it's like listing is maybe different

than listings in you know or something like that. And so again it feels like there's a lot of ambiguity in all of this, and I yes, interviewing someone interviewing more people about their experience on these sites. Do they actually get callbacks for jobs that they're qualified for that they continually see posted? I think would be very useful. So hopefully as someone listening, call us up, name it the odd odd Survey, great idea, Boka, the Odd Book,

the Odd Book that is at ring to it all? Right, Um, let's leave in there. Let's leave it there. This has been another episode of the Odds Podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Alloway and I'm Joe Why Isn't All? You can follow me on Twitter at the Stalwart. Follow our producer on Twitter, Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg head of podcast, Francesco Levi at Francesca Today and check out all of

our podcasts on Twitter under the handle at podcasts. Thanks for listening.