The Chicago Federal Reserve announced on Tuesday a new “real-time” estimate of the U.S. unemployment rate, combining government and private data to provide faster updates twice a month. The measure, drawing on the Current Population Survey, payroll processor ADP, job site Indeed, and Google data, indicates that unemployment likely remained stable at 4.3% in September.
The report also showed a slight rise in hiring among unemployed workers, offset by increased layoffs and other job separations. Released nearly two weeks before the official September employment report on October 3, the data gives policymakers an early look at labor market trends, which are crucial for decisions on interest rates.
“One of the hardest things a central banker has to do is get the timing right in moments of transition, and that’s why real-time data can be so important,” said Austan Goolsbee, president and CEO of the Chicago Fed.
The Federal Reserve recently cut the benchmark policy rate by a quarter percentage point, and Fed Chair Jerome Powell is scheduled to comment later on the outlook for potential rate reductions at the October meeting. Real-time labor data helps officials gauge economic shifts more quickly than official reports, which are often delayed, and provides an independent check against government statistics.
Since the pandemic and the rapid policy changes of recent years, the Fed has increasingly relied on outside indicators to monitor economic conditions amid canceled data releases and staff changes at statistical agencies. The new estimate supplements traditional data, offering early insights into whether the labor market is weakening or remaining stable.
