Developed economy labor markets are returning to more normal patterns. The collective mid-life crisis, when everyone decided that happiness was best achieved by changing employer, has faded. With less job churn, the relationship of job vacancies to unemployment has normalized, UBS macro analyst Paul Donovan notes.
Flexible working may be improving labor market efficiency
“Fewer workers quitting has lessened the incentive for employers to hoard labor. This has not resulted in a surge in layoffs—demand in developed economies is not weak enough to justify that—but it may increase the sensitivity of labor markets to future consumer demand.”
“Labor markets today differ from pre-pandemic norms. There is evidence of more automation when labor is hard to find, boosting productivity. Flexible working may be improving labor market efficiency by reducing geographic constraints and allowing people to better match their skills to jobs. This trend also supports more women working for better pay.”
“Cyclically, what matters is whether fear of unemployment remains low. If unemployment rises because of more people entering the workforce, there is less need to worry about economic activity. Reduced hiring signals an economic slowdown, not a recession. However, if things change and more people who currently have jobs are fired, fear of unemployment would rise.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.