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We're starting to see some long-term scars in the U.S. labor market: Morning Brief

Layoffs hit a record low in September, but permanent job losers are skyrocketing. Yahoo Finance's Myles Udland breaks down today's Morning Brief on Yahoo Finance Live.

Video Transcript

JULIE HYMAN: Speaking of data points, we are getting a little more clarity on the jobs market here in the United States. We've got jobless claims this morning, for example, coming in a little bit better than estimated, but still over 700,000 on a weekly basis. Myles, in the "Morning Brief" today, you wrote about the different questions around how many a job loss are permanent and where we're at right now. We're getting a little more clarity.

MYLES UDLAND: Yeah, and I think it's important to be thinking longer term in the context of the crisis that has come and, not gone, but certainly came on very quickly, and we've repaired ourselves quite a large way of that damage in a short amount of time. And so things that have stood out over the last couple of labor data points, we've got the jobs report last Friday, initial claims today, and also the JOLTS report, job openings, on Tuesday morning. And we continue to see the number of permanently unemployed folks rise. We actually saw job losers, permanent job losers, in October rise above the number of temporarily unemployed folks for the first time since February in the October report, so that's kind of a death cross, if you will, of the temporary unemployed coming down, showing how much slack remains, while permanently unemployed folks are on the rise.

They're going to be the long term unemployed. They're the folks that could be sort of dislocated from the labor market on a structural basis longer term. And then also within that JOLTS report, this is a report that really gained prominence. And I know, Julie, you and Brian will remember when Janet Yellen called out the JOLTS report back in, I think it was 2013 or '14, just before she became Fed Chair, as a real indicator for Yellen of health of the labor market. It essentially shows dynamism, right?

How many people are hiring? How many people are quitting? How many people are getting laid off? How much churn is there in the labor market? More churn would be a good thing, and we've seen job openings come down about 600,000 from their highs hit back at late 2018, early 2019. And you know, they've rebounded some, obviously, since March and April and May, but we're still down on a structural basis from that level that we saw a couple of years ago, and I think there's real concern.

A word I use is ossify, calcify, whatever you want to say, right? There's a hardening of some of this damage in the labor market that I think is going to bear very close watching as we get through a vaccine and we say, oh, everything's fine. Well, that might be so, but in 2022, there could be a couple million people out of work who are just disconnected from the labor market, and that's going to be another leg of dealing with this recovery.