Guy Berger

Imho “what will happen to the labor market if health care weakens” gets the causality chain backwards

8/ Hispanic and African-American unemployment rates rose in February. In the case of African Americans, it's much higher than a year ago.

7/ Defying continuing claims, the unemployment rate due to permanent layoff is refusing to decline (indeed, it's rising veeeery slowly).

6/ Another snippet of good news... marginally attached and discouraged worker prevalence fell in February.

5/ Unemployment rates for young people rose - more so for people in their late teens than for people in their early 20s.

(For people in their early 20s unemployment rates are lower than they were a year ago... probably noise in small CPS subgroups.)

4/ Not everything in the report was bad. Part-time-for-economic-reasons, which people were freaking out about 2-3 months ago, is now the lowest it's been since mid-2024.

(My bet is this will keep creeping up slowly as the labor market cools, noise aside.)

3/ Prime working age employment has been ~flat over the past year, but prime working age participation has been booming... even after a slight dip in February, still higher than it was a year ago, and close to its cyclical high.

2/ Prime working age employment population ticks down to 80.7%. Has been fairly flat over the past ~16 months, as people with jobs have been relatively insulated in this low hiring, low firing environment.

if it wasn't for the war, I'd say that very negative takes on the US labor market based on this report would be a big overreaction

(just like people overreacted with optimism last month)

BLS charts:

1/ Following on the heels of two good jobs report, an ugly report... big decline in nonfarm employment, a jump in the unemployment rate.

A win for "Team Doomer", a whiff for "Team Reacceleration."

Jobs Day: Breaking Down The Latest Data YouTube video by Bloomberg Opinion

We’re going to talk jobs and retail numbers in a few minutes!

youtube.com/live/8T92H60...

Yes! Just the January value of the BLS series (not covered employment)

The Indeed job postings time series continues to very slowly converge toward a trough...

-4.7% Y/Y toward the end of February - the least bad since late 2022.

i love smart people who know things. thank you.

There will probably lots of hemming & hawing about how job cut announcements in Feb 2026 are flattered by a comparison to the DOGE announcements a year earlier BUT

More important: the supposed surge in actual layoffs heralded by fall announcements barely materialized (if at all)

for those who know things... is it possible that covered employment (the denominator for the insured unemployment rate) has been overestimated recently?

3/ The reason I'm casting doubt on this upbeat news from a high quality data source is that we don't (yet?) see the same improvement in the corresponding BLS data.

Unemployment due to permanent layoff has not fallen in the last few months, unlike continuing claims.

2/ And continuing claims continue to run a little below 2025 levels. A big break from most of the past few years when they were growing at mid-single-digit levels.

As with initial claims, I have some mild doubts the picture is this rosy. (But hope to be proven wrong.)

Claims:

1/ Jobless claims low, again. 213K in the week ended 2/28 - below 2025 & 2023 levels; near 2024 levels.

No sign of rising layoffs here, indeed they seem to have declined. (Though I do worry this is a *little* too optimistic... let's see what January JOLTS looks like.)

I agree quits is a better “average” but very low hiring is interesting for “distributional reasons” (from outsiders to insiders)

Yeah. Hiring has strong early 2010s vibes. Other dimensions, (much) less so

7/ To wrap... I think it's a good idea to think about ways to fix online job matching which has clearly gone astray. But unfortunately I don't think it will boost hiring that much.

6/ I'm open to the possibility that falling hiring efficiency has had a second order effect here. I'm also open to falling hiring efficiency as a partial explanation for why the current low hiring / low firing combo is a more extreme version of its 2007-08 version

5/ Granted, prime-working age employment did fall a little in 2007 and early 2008; the trajectory has been flattish over the past few years. Baseline layoffs (before increase) were quite a bit higher in 2005-08 than now. My guess is that might account for the difference.

6/ I'm open to the possibility that falling hiring efficiency has had a second order effect here. I'm also open to falling hiring efficiency as a partial explanation for why the current low hiring / low firing combo is a more extreme version of its 2007-08 version

4/ We saw something similar in 2007 and the beginning of 2008. Hiring fell a lot leading up to, and in the early part of, the Great Recession without much of an increase in layoffs. Prime working age employment fell only a little.

3/ I'm less convinced by the 2nd half. The divergence between weak gross hiring and resilient prime working age employment is not surprising! Weak hiring is much likelier to negatively impact young people who don't have a job (or job hop a lot) than prime working age folks.

Tech Innovation in Labor Market Matching A Formerly Useful Sword Develops a 2nd Edge

2/ The most provocative argument in the essay: falling costs of application have reduced the efficiency of the hiring process, lowering hiring. I think the 1st half is correct, though it isn't solely due to LLMs. I wrote about this last year: macromostly.substack.com/p/tech-innov...

The Tinder-ization of the job market Why nobody's getting hired in a "good" economy

Thread: I don't think reduced efficiency in the hiring process is primarily responsible for weak hiring.

1/ I'm a long-time fan of Matt Darling (@besttrousers.bsky.social ) and enjoyed reading his piece in
@theargument.bsky.social . However...

www.theargumentmag.com/p/the-tinder...

One impression I get from the reactions to ADP this morning is people don't follow the weekly data they publish very closely

(chart is what that data showed as of a week ago)