A Cup of JOE (12/18)
Is Labor Supply Balanced with Unfilled Demand?
Marissa Hashizume, NLx Research Hub Economist
December 18, 2025
Welcome to A Cup of JOE, a blog series. Each post will serve up fresh insights into U.S. job openings using the NLx Job Opening Estimator (NLx JOE) — a tool that blends federal government data with NLx Research Hub data and analytics to provide timely, detailed estimates of labor demand trends. Whether you’re a workforce professional, researcher, or just curious about employment opportunities, this series will keep you informed on interesting and emerging trends in labor demand, supporting data-driven decision-making and broader awareness of what is happening in the labor market.
Last week, we posted a blog on job opening trends of the past few years. But what does that look like in the context of other labor market indicators? Some of the most common labor market metrics relate to employment and unemployment because they provide high-level context for the labor force, both those currently working and those looking but unable to find work. Together, employment and unemployment figures provide context for job opening data by relating labor demand to the workforce, or labor supply.
Generally, we can think of labor demand in two parts: demand that is already filled with labor supply (employed workers) and demand that is unfilled (openings). The job opening rate is a commonly used metric that shows job openings as the unfilled portion of labor demand, or unmet demand (calculated as job openings divided by the sum of employment and job openings). In 2025, the job opening rate hovered around 4.5% after declining for the past few years in a trend similar to job openings. However, parallel to job openings, the job opening rate dropped off in November 2025. In other words, the drop in job openings was truly just a drop in unfilled or unmet demand while filled demand (so far) remains mostly the same (filled demand or employment has been pretty stable over the past three years, at least relative to job openings).
The number of job openings per unemployed person provides a measure of labor market tightness, a common way to incorporate unemployment in labor demand. Put another way, labor market tightness is the ratio of unfilled demand to unused supply, or how the excesses on the demand and supply side stack up to each other. The summer of 2025 was the first time since 2021 where excess supply eclipsed excess demand. They are still roughly equal, but, unlike job openings and the job opening rate, this measure has not obviously leveled out at any point this year, although it is declining at a slower rate since mid/late 2024. In other words, even though job openings leveled out earlier this year, unemployment has been increasing a bit, so the ratio continued with a more modest decline.
Note that there is a pretty consistent cyclic nature to this tightness measure, so we anticipate the raw (not seasonally adjusted) numbers to show a continued loosening for the next few months. This would reflect more of an expected cycle rather than an alarming trend. However, at that point, unused supply will likely overshadow unfilled demand.
Note that unemployment data is unavailable for Oct. 2025 due to the government shutdown. We have filled in the missing unemployment data with the average of Sep. and Nov. unemployment to avoid a gap. Please see this BLS announcement for more information on the impact of the shutdown on the CPS statistics, including higher standard errors for Nov. 2025.
A balanced labor market – which is where we are now – theoretically, means that our labor force can perfectly meet labor demand with unused supply slotting into unfilled demand. A tighter labor market – where we have been for the past few years – theoretically, makes it easier for workers to find jobs but more difficult for employers to find talent. If the labor market continues to loosen, then workers could potentially have a harder time finding jobs.
The reality is that while the job opening rate and labor market tightness give us context for labor demand relative to labor supply, it’s a high-level picture. Looking at this data alone does not tell us if there are more nuanced supply-demand alignment issues by skills, geographic location, etc., or why that might be happening. It’s important to also keep in mind other labor market and economic contexts, such as industry trends, technological advancements, and policy and political changes, to name just a few.
***A Cup of JOE examines job opening estimates from the NLx Job Opening Estimator (NLx JOE). Explore job opening numbers, see methodology notes, and more on NLx JOE, updated with new estimates monthly. Note that estimates from the most recent months are subject to minor revisions after additional federal data becomes available.***
