by Calculated Risk on 10/06/2014 10:37:00 AM

The Fed staff has developed a labor market indicator that they call the Labor Market Conditions Index (LMCI). From the Fed: Assessing the Change in Labor Market Conditions

This Note describes a dynamic factor model of labor market indicators that we have developed recently, which we call the labor market conditions index (LMCI). ...

A factor model is a statistical tool intended to extract a small number of unobserved factors that summarize the comovement among a larger set of correlated time series.2 In our model, these factors are assumed to summarize overall labor market conditions.3 What we call the LMCI is the primary source of common variation among 19 labor market indicators. One essential feature of our factor model is that its inference about labor market conditions places greater weight on indicators whose movements are highly correlated with each other. And, when indicators provide disparate signals, the model's assessment of overall labor market conditions reflects primarily those indicators that are in broad agreement.
...
In terms of the average monthly changes, then, the labor market improvement seen in the current expansion has been roughly in line with its typical pace. That said, the cumulative increase in the index since July 2009 ... is still smaller in magnitude than the extraordinarily large decline during the Great Recession (... from January 2008 to June 2009).

The Fed staff released the updated LMCI through September this morning.  This includes 19 indicators (see link above).

Click on graph for larger image.

This graph shows the cumulative change in the index. The Fed staff didn't release any commentary this morning, but the cumulative increase is still smaller than the decline during the Great Recession (suggesting slack in the labor market).