[Updated to include December data] Late to the commentary, here’s a picture of the jobs-workers gap for November, based on JOLTS data:
Figure 1: Jobs-worker gap, 000’s, s.a. (blue, left scale), and gap, %, s.a. (tan, right scale). NBER defined peak-to-trough recession dates shaded gray. Source: BLS JOLTS data via FRED, NBER, and author’s calculations.
Note that the gap remains large, so the labor market remains tight (and in fact the gap was at a maximum in 2022H1). To see this further, layoff rates are still far from hiring rates.
Figure 2: Hirings to nonfarm payroll employment (blue), and hiring to nonfarm payroll employment. (tan). NBER defined peak-to-trough recession dates shaded gray. Source: BLS JOLTS data via FRED, and author’s calculations.
The quit rate actually rose in November. From my view, the labor market remains pretty tight, and I observed that on Marketplace on Monday.
Are we in recession as of November? We can use the Job Workers Gap Business Cycle Indicator (JWGBCI) suggested by Paweł Skrzypczyński in this post, which equals the difference between the current gap and the maximum gap over the last 12 months. The value for 2022M11 is -0.89, still above the threshold value of -0.93 — but it is coming closeer over time (it actually breached the threshold, as I have calculated it, in August before popping above the threshold).
Updated and corrected, 1/6/23 10:45PM:
My calculation of the JWGBCI was failed to use the 3 month smoothed series in the calculation. Pawel Skryzypczinski provided the correct calculation and graph:
Dr. Skrzyzpczinski observes: “As of December 2022 the jobs-workers gap was at 2.9% or 4.7 mn, up from November by 0.2 pp or 0.2 mn (job openings assumed to be unchanged in December form November). Revisions to HH survey had minor impact on the measure. This new data brings the JWGBCI to -0.7 pp down from -0.6 pp in November and still above the recession threshold of -0.93 pp. To make a recession call for January 2023 we would need to see the jobs-workers gap to collapse to 1.9% from 2.9% in December, very unlikely.”