Unemployment Rate
Unemployment Level/Labor Force
Lower unemployment levels generally indicate a healthier labor market. There will always be a “natural” level of unemployment due to people changing jobs, changing technology, and mismatch of skills.
Labor Force Participation Rate: Labor Supply
Labor Force/Working-age Population
The labor force participation rate is one measure of labor supply in the economy. Below normal labor participation creates additional job openings that can’t be filled.
Job Openings: Labor Demand
Job openings indicate unfilled positions by employers.
Job Openings, Hires, and Separations Rate
Openings, hires, separations/Labor force
Jobs are being added if hires is greater than total separations. A decrease in job openings, while jobs are still being added to the economy could be a result of a higher labor force participation. The decrease in job openings could also indicate more hesitancy
by employers to expand the size of their workforce.
Openings to Unemployment Ratio
This ratio shows how “tight” the labor market is. A ratio in the range of 1.0-1.2 generally indicates a job market that is generating a healthy amount of inflation.
Quits and Layoffs
Separation/Employment Level
Quits and layoffs tend to be inversely correlated — quits increase when workers are confident they can leave their current job to find a better job. Increased layoffs could indicate business uncertainty or a weakening labor market.