As mentioned late last week, today and tomorrow we get a couple of important US labor market datapoint we are closely tracking. i.e. JOLTS and Employment Cost Index (ECI) releases.
Here is how the number of job openings (JOLTS / thousands) and ECI changes year-on-year (YoY) have evolved since January 2002, when the data was first published:
Here Beveridge curve uses the ratio of job openings to unemployment rate versus ECI:
And the Phillip curve in the strictest definition which compares unemployment with wage inflation (not CPI or PCE inflation as is commonly done):
Unfortunately, we don't have a sufficient amount of data to produce reliable forecasts for where the next data prints will come. However, when we look at the time-series changes when removing for exogenous shocks (GFC and COVID), there's evidence of segment trends and normal distribution statistics.
Meaning, there's a high chance the JOLTS/ECI plot continues to shift to the bottom left corner.
Work in progress.
