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Measuring Labor Market Tightness: Data Update and New Web Feature


Abstract: Good measures of labor market tightness are essential to predict wage inflation and to calibrate monetary policy. In an October 2024 post, we introduced a new indicator of labor market tightness and showed that it tracked wage inflation best out of a broad range of tightness measures. In this post, we update our index through 2025 and show that it also forecasts future wage inflation best both in and out of sample. In addition, we highlight availability of the index as a new regularly updated feature on the New York Fed’s website.

JEL Classification: E2; J2;

https://doi.org/10.59576/lse.20260108

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File(s): File format is text/html https://libertystreeteconomics.newyorkfed.org/2026/01/measuring-labor-market-tightness-data-update-and-new-web-feature/
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Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2026-01-08

Number: 20260108