Beyond the Unemployment Rate: Eight Different Faces of the Labor Market

Samuel Kapon and Ayşegül Şahin

This morning, the New York Fed released a new set of charts measuring various dimensions of the labor market. These charts are mostly generated from data available through the Current Population Survey (CPS), the Current Employment Statistics (CES) program, and the Job Openings and Labor Turnover Survey (JOLTS). This new monthly release will provide timely updates to help economists and the public understand national labor market conditions. The charts are split into eight distinct categories: unemployment, employment, hours, labor demand, job availability, job loss rate, wages, and mismatch.

Unemployment
The charts in this section display aggregate, prime-age male, and prime-age female unemployment rates, as well as special unemployment rates. The unemployment rate can change for a number of reasons, one of which is the exit of discouraged or marginally attached workers. U5 accounts for this by including discouraged and other marginally attached workers in the unemployment rate. U6 includes the part-time employed (for economic reasons), on top of those extra workers included in U5. Broader unemployment is another measure that includes those who report to the CPS that they want a job but are not currently participating in the labor force.

Employment
The employment-to-population ratio, payroll employment (monthly change, private and total), household employment (monthly change), and temporary employment (monthly change) are plotted as measures of employment. Taken from different data sources, these measures gauge job growth as well as the degree to which employment is keeping up with the growth of the working-age population (employment-to-population ratio).

Hours
Average weekly hours (twelve-month change), the index of aggregate weekly hours (twelve-month change), and the fraction of workers who are full-time are reported in this section. These plots help track the changes along the intensive margin of labor (average hours worked) and provide a measure of total labor input in the economy (aggregate weekly hours).

Labor Demand
Included in this chart set are vacancy and hire rates, as well as the diffusion index calculated from CES data. The diffusion index measures the dispersion of employment change in industries and provides information on how widespread employment gains are. This section also includes job-availability measures, such as the vacancy-unemployment ratio, job-finding rate, quit rate, and the median duration of unemployment. The vacancy-unemployment ratio provides a measure of job availability for unemployed workers in the labor market. The job-finding rate is measured as the fraction of the unemployed who find jobs within a month.

Labor Force Participation
The labor force participation rate, in the aggregate and for prime-age males and females, is plotted here. Also included in this section are charts of flow rates into and out of the labor force. These charts give a sense of long-term participation trends while also providing perspective on short-term changes in the unemployment rate.

Job Loss
This section provides measures of the rate at which workers are either laid off or discharged (the job-loss rate), drawn from the JOLTS. Also included is a similar measure, the monthly employment-to-unemployment flow rate, calculated from the CPS. Finally, we plot initial claims from the Department of Labor.

Wages
Average hourly and weekly earnings are plotted here.

Mismatch
This section shows the mismatch index developed by Şahin, Song, Topa, and Violante (2013) for industries and occupations. This index provides a measure of the imbalance between the characteristics of job openings and unemployed workers.

Disclaimer
The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.