The Fed's New Labor Market Measure: Wealth Creation Vs Jobs?

The Fed’s New Labor Market Measure by Frank Shostak, Ludwig von Mises Institute

Economists at the Federal Reserve have devised a new indicator, which they hold will enable US central bank policymakers to get better information regarding the state of the labor market. The metric is labeled as the Labor Market Conditions Index (LMCI).

Note that one of the key data points Fed policymakers are paying attention to is the labor market. The state of this market dictates the type of monetary policy that is going to be implemented.

Fed policymakers are of the view that it is the task of the central bank to navigate the economy toward a path of stable self-sustaining economic growth.

One of...