Bradley Speigner at the B of E's Bank Underground blog (wonder if same is true for US?):
Finding a Match: Is falling unemployment masking a broader deterioration in UK labour market performance? The ease with which a typical job seeker lands a job is a crucial indicator of the health of the labour market, which cannot be fully inferred from just a casual glance at the headline unemployment rate. It is true that unemployment has declined quite rapidly recently. But this is because job openings have been unusually abundant while the labour market’s capacity to match individual workers to available jobs quickly has actually worsened. This capacity is referred to as matching efficiency, and it started falling in the UK even before the 2008 recession. ...
What the data suggest so far is that job seekers’ chances of finding a job in the UK are lower than would be expected given how tight the labour market has been. This conclusion is broadly consistent with other business intelligence gathered by the Bank’s network of Agents. How persistent the decline in matching performance turns out to be will have important implications for the evolution of unemployment. In general, low matching efficiency tends to slow the rate at which unemployment falls during cyclical recoveries. In the latest data, although unemployment did drop further, this appears to be due to a remarkably low job destruction rate rather than a significant improvement in exits from unemployment. Weak matching efficiency might be increasing the incentives for firms to raise employment through a fall in the firing rate rather than through hiring.
Most academic research on matching efficiency suggests caution about expecting a rapid improvement. One fairly robust (and somewhat counterintuitive) finding in the applied literature is that matching efficiency tends to trend downward over time (Petrongolo and Pissarides, 2001). This contradicts the notion that easier job search brought about by information technology has resulted in faster job finding rates, as a moment of casual introspection might otherwise initially suggest.
Detecting a trend is one thing. Explaining it is another. One possibility is that a gradual move towards increasingly specialised labour markets might actually be complicating the matching process. Maybe finding a match is increasingly becoming like looking for a needle in a haystack.