“In March last year the vacancy rate started to rise, without drawing down in the unemployment," says professor Steven Davis, making for what he sees as a troubling move in the curve. “It broke down rather substantially.”
Davis believes the repeated extension of jobless benefits for long-term unemployed workers has made job seekers more willing and financially able to hold out for better jobs. But, in the mean time, their skills are falling behind, making them less employable.
“We have to some extent set ourselves up to have 1 to 2 percent of the workforce without jobs for long time, with dim prospects of returning to a job market even after the market recovers,” he cautions. “That's what kind of worries me.”
New York Federal Reserve President William Dudley doesn’t see the Beveridge Curve signaling a long-term structural problem in the jobs market.
"The loop in the Beveridge that is evident now has been seen in the past business cycles," Dudley said in a speech at the Stern School of Business earlier this week. "This strongly suggests that the rise in job mismatch has a cyclical component."
When Workers Can’t Move For Jobs
Mark Zandi, of Moody’s Analytics, believes the shift in the Beveridge Curve is likely temporary. But, he is concerned that the downturn in the housing market may be making it harder for job vacancies to be filled.
“So many people are underwater on their mortgages and they can’t move,” he says. “So, they lost a job in Las Vegas and can’t move to L.A. because of their mortgage.”