KC Fed LMCI Implies the Labor Market Is Closer to a Full Recovery than the Unemployment Rate Alone Suggests

Glover, Andrew; Mustre-del-Rio, Jose; Pollard, Emily

Journal Article

KC Fed LMCI Implies the Labor Market Is Closer to a Full Recovery than the Unemployment Rate Alone Suggests

Abstract: By consolidating information from a broad range of labor market variables, the Kansas City Fed Labor Market Conditions Indicators (LMCI) provide a consistent gauge of labor market tightness. Adjusting the unemployment rate to incorporate information from the LMCI suggests the labor market is closer to a full recovery than the unemployment rate alone implies.

Keywords: Labor Market; Unemployment; Labor Market Conditions Indicators (FRB Kansas City LMCI); COVID-19; Pandemic;

JEL Classification: J20; J23;