Assessing Labor Market Conditions Across Regions

Assessing labor market conditions across regions can be challenging. While the Kansas City Fed Labor Market Conditions Indicators (LMCI) provide a holistic picture of national labor market health, they do not capture region-specific labor market data. The health of regional labor markets may vary substantially from the national trend, especially if they are heavily concentrated in particular industries or if the demographics of their workforces differ from the national average. To help account for this variation, José Mustre-del-Río and Emily Pollard combine information from a variety of labor market data series to create measures of regional labor market health. Specifically, they construct series similar to the KC Fed LMCI for the nine U.S. Census Bureau-defined geographical divisions and call these series the DIV-LMCI. The authors find that the DIV-LMCI effectively capture variation in divisional labor markets and can be interpreted similarly to the national LMCI series. They also find that the DIV-LMCI pick up some division-specific departures from the national trend. Their results suggest the DIV-LMCI may be useful not only for region-specific analysis, but also for providing a more nuanced picture of the national U.S. labor market.