Thursday, August 28, 2014

Labor Market Statistics and the Federal Reserve

An article in the New York Times (http://www.nytimes.com/2014/08/25/business/central-bankers-new-gospel-spur-jobs-wages-and-inflation.html?ref=business) discusses how central banks’ attitude towards unemployment has changed. Basically, central banks (the Federal Reserve in the United States and similar organizations in other counties) used to be concerned primarily with inflation. Now central banks are increasingly concerned with unemployment.

The article also mentions (and links to) a new 19-component index of labor market conditions (called the Labor Market Conditions Index [LMCI]). The new index – discussed at http://www.federalreserve.gov/econresdata/notes/feds-notes/2014/assessing-the-change-in-labor-market-conditions-20140522.html - is intended to give a holistic assessment of the labor market.


What are the main things included in the index? What elements are emphasized in the LMCI that were not part of the traditional overview of the labor market?

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