Assessing Conditions in the Labor Market

Abstract

This memo examines several measures for assessing labor market conditions. The unemployment rate is arguably the best single summary indicator of the state of the labor market. It is a timely and widely recognized measure but has drawbacks, such as distortions from changes in labor force participation and measurement errors. Looking at a variety of other indicators, notably nonfarm payroll employment, is crucial for a robust assessment of the labor market’s current state and future trajectory.

Publication
Aaronson, Stephanie, Bruce Fallick, Christopher Nekarda, and William Wascher (2012). “Assessing Conditions in the Labor Market,” Memorandum to the Federal Open Market Committee. Washington: Board of Governors of the Federal Reserve System, November 30, 2012.
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