Bob's Daily Buzzword: `Beveridge Curve'

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July 18 (Bloomberg) -- Bob Rice, general managing partner with Tangent Capital Partners LLC, explains "Beveridge Curve" on Bloomberg Television's "Money Moves." (Source: Bloomberg)

," and we are looking at beveridge curve, very much related to what is going on in the jobs market and jobs data.

Does not have anything to do with how much water is being consumed in new york city today.

This is named after an economist, and it is a very important piece of the analytical toolset for the economist.

What it does is it compares the vacancy rate of open jobs to the unemployment rate.

When the unemployment rate is high, the vacancy rate is low, and indeed, if you look at most charts -- let's pull it up so we can see it.

Normally, you will see a smooth curve there.

Here's the actual data that we have looked at over just the last couple of -- over the last decade or so.

This basic smooth curve is, in fact, present, but suddenly, there has been this shift to the upper right over the last few years.

What are economists saying about this?

This is really unusual behavior . 2010, 2011, 2012, we had this big shift.

What is going on here?

The market is inefficient for jobs.

They are economists.

Economists never agree on anything.

They are all arguing about what the causes are, but this three or four structural problems in the economy.

One we were just talking about is every month, there are millions of jobs that go on filled, and it's because, at least in theory, the american workforce is not qualified to do them.

They are mostly science jobs, i.t. jobs, tech, and engineering.

Yes, and that's exactly what you see on this chart.

There are other parts of it as well.

Some people think the extension of unemployment benefits disincentive people from going out and filling these jobs, so it kept the unemployment rate hike even though there were plenty of vacancies.

That's another idea, but it seems to me, the least likely, or less likely than people just not being qualified for what is out there.

Most people would agree with you, and there is a third explanation as well.

Employers understand they will need to fill these jobs, but there are no big hurries to do so because their -- their our worries about whether the recovery is real.

They are listing vacancies but not worrying about trying to fill them.

This text has been automatically generated. It may not be 100% accurate.

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