Guest Contribution: “Gauging Recessions with the Jobs-Worker Gap – Updated”
Today, we are fortunate to present a guest contribution written by Paweł Skrzypczyński, economist at the National Bank of Poland. The views expressed herein are those of the author and should not be attributed to the National Bank of Poland.
We present an update of the jobs-workers gap discussed in this post: http://econbrowser.com/archives/2022/09/guest-contribution-gauging-recessions-with-the-jobs-workers-gap.
In August the jobs-workers gap declined to 2.5% from 3.4% in July owing to a significant drop in job openings. If we assume that job openings stay at August level in September and incorporate September data from the Household Survey we arrive at the gap of 2.6% in September. However, our business cycle indicator based on the jobs-workers gap, the JWGBCI, calculated as the change of the three-month moving average of the jobs-workers gap relative to its maximum during previous twelve months, drops from -0.5 pp in August to -0.6 pp in September. Recall that the recession trigger is at -0.9 pp.
Figure 1. Jobs-Workers Gap, %
Figure 2. Jobs-Workers Gap Business Cycle Indicator, Percentage Points
Conclusion: Labor market conditions eased and remain still consistent with the soft landing scenario.
This post written by Paweł Skrzypczyński.