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Consumer and Firm Perceptions of the Aggregate Labor Market Conditions

Author

Listed:
  • Marianna Kudlyak
  • Brandon E. Miskanic

Abstract

In the pre-pandemic period, measures of consumer labor market perceptions correlated well with the aggregate unemployment rate. However, for more than a year during the pandemic, consumers perceived labor markets as much tighter than the high aggregate unemployment rate implied. In contrast, there is no such a departure from the historic relation if we use the jobless unemployment rate-unemployment for reasons other than temporary layoffs-as a measure of labor market tightness. Using a measure of the firm labor market perceptions from the National Federation of Independent Business, we find that during the post-pandemic period, firms perceived labor market as being tighter than what consumers perceived, given the historic relation between the two series. Furthermore, despite the vacancy-unemployment ratio was at its historic high levels during the post-pandemic period, our measure of firm perceptions signaled that the labor market was even tighter. In June-July 2024, the relations between consumer and firm perceptions and between various measures of labor market tightness are back to its pre-pandemic patterns.

Suggested Citation

  • Marianna Kudlyak & Brandon E. Miskanic, 2024. "Consumer and Firm Perceptions of the Aggregate Labor Market Conditions," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2024(28), pages 1-20, August.
    • Handle: RePEc:fip:fedfel:98696
    DOI: 10.24148/wp2024-28
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    References listed on IDEAS

    as
    1. Almut Balleer & Georg Duernecker & Susanne Forstner & Johannes Goensch, 2023. "Biased Expectations and Labor Market Outcomes: Evidence from German Survey Data and Implications for the East-West Wage Gap," CESifo Working Paper Series 10336, CESifo.
    2. Koşar, Gizem & van der Klaauw, Wilbert, 2023. "Workers' Perceptions of Earnings Growth and Employment Risk," IZA Discussion Papers 16013, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    consumers; firms; unemployment; recessions; temporary layoffs;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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