Updating the Labor Market Conditions Index


Notice: Monthly updates of the LMCI were discontinued on August 3, 2017. We will provide updated estimates of the labor market conditions index (LMCI) every month, to be posted sometime after 10:00 a.m. on the first business day following the Bureau of Labor Statistics’ monthly Employment Situation report.

FEDS Notes. Washington: Board of Governors of the Federal Reserve System, October 1, 2014.

Notice: As of August 3, 2017, updates of the LMCI have been discontinued; the July 7, 2017 vintage is the final estimate from this model.

We decided to stop updating the LMCI because we believe it no longer provides a good summary of changes in U.S. labor market conditions. Specifically, model estimates turned out to be more sensitive to the detrending procedure than we had expected, the measurement of some indicators in recent years has changed in ways that significantly degraded their signal content, and including average hourly earnings as an indicator did not provide a meaningful link between labor market conditions and wage growth.

Christopher J. Nekarda
Christopher J. Nekarda
Principal Economist

Any views expressed on this site are my own and do not necessarily represent the views or policies of the Board of Governors of the Federal Reserve System or its staff.