Why Yellen Might Turn Her Back on a Labor Market Barometer She Once Championed
Why the Fed Chair isn't sweating the decline in the labor market conditions index.
The One Thing the Fed Should Say, but Doesn't
This article is for subscribers only.
In a 2014 speech, Federal Reserve Chair Janet Yellen drew attention to one comprehensive metric that would serve as a better pulse on the state of the jobs market than the unemployment rate alone: the 19-part labor market conditions index, or LMCI.
This composite barometer draws on a host of data, including employment, underemployment, workers' wages and average workweek length, job openings, as well as hirings and firings, to produce a summary statistic showing if conditions in the labor market improved from one month to the next.