The labor market deterioration from late 2007 to early 2009 followed the historical cyclical
negative relationship between job openings (vacancies) and unemployment (i.e., moving down
the Beveridge Curve with rising unemployment and falling vacancies). In other words, rising
unemployment through around May 2009 looked like a severe but normal cyclical
unemployment increase. But the unemployment rate continued rising in 2009 after the job
openings rate stabilized and the unemployment rate is now much higher than would be implied
by the historical Beveridge curve (Elsby, Hobjin, and Sahin 20010). This pattern suggests the
potential emergence of structural unemployment problems of mismatches between the
unemployed and potential new jobs and/or the exacerbation of the longer-term U.S. labor market
trends of rising wage inequality and declining employment opportunities in traditional middleclass
jobs.