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One chart that explains why the job market should speed up this fall

Last week, we saw some evidence that the job recovery is speeding up. This chart offers some more good news — job openings have surpasses their pre-recession peak level from 2007:

(BLS data)

Actual hiring, as you can also see, has not yet fully recovered. One theory about this that some economists adhere to is that it shows that something is fundamentally broken in the labor market (the jargon term Beveridge Curve often comes up in these arguments) such that employers can no longer find workers to fill jobs. But if that were the case, then you'd be see wages skyrocketing for the already employed. At the moment that's not happening. Flat wages are, of course, a form of bad news. But if you read this chart in light of those flat wages, it should make you more optimistic about the future. Employers have been a bit slow to fill their open jobs but the backlog is there. We should expect either a speed-up in hiring, a speed-up in wage growth, or some combination of the two in the near future.