Food inflation remains higher than measures of overall inflation, and labor markets have been tight. We find that processed food products have driven recent increases in grocery prices, and we argue that labor market tightness affects the prices of these labor-intensive products in particular through increases in production and distribution costs. Food inflation at grocery stores could remain elevated if price pressures on the supply side persist and demand for food at home remains strong.

Since the COVID-19 pandemic, the United States has experienced sharply rising then falling inflation alongside persistent labor market imbalances. This Economic Commentary interprets these macroeconomic dynamics, as represented by the Beveridge and Phillips curves, through the lens of a macroeconomic model. It uses the structure of the model to rationalize the debate about whether the US economy can expect a hard or soft landing. The model is surprised by the resiliency of the labor market as the US economy experienced disinflation. We suggest that the model’s limited ability to capture this resiliency is a feature of using a linear model to forecast the historically unprecedented movements seen after the pandemic among inflation, unemployment, and vacancy rates. We explain how, by adjusting the model to mimic congestion in a tight labor market and greater wage and price flexibility in a high-inflation environment, as during the post-pandemic period, the model can then capture what has been a path consistent with a soft landing.

Rent inflation responds more to labor market conditions compared with other components of inflation. We attribute this link between labor market tightness and rent inflation to greater demand for rental units afforded by job gains and wage growth. Although online measures of asking rents currently suggest official measures of rent inflation will decline, we caution that rent inflation is likely to remain above pre-pandemic levels so long as the labor market remains tight.

Measures of wage growth have increased substantially during and after the pandemic compared to their average levels in the decade before. Does higher wage growth reflect compensation for a higher cost of living, brought about by an increase in inflation in the past two years? Or has an imbalance between strong labor demand and restrained labor supply lifted wage growth? Using a new empirical wage Phillips curve model, we find that the increase in wage growth largely reflects the pass-through of higher inflation and does not reflect labor market imbalances. The model forecasts a decline in wage growth to about 3 percent annually by 2025.

A tight labor market tends to raise wages and lower unemployment, but an overly tight labor market can cause inflation. Labor market momentum, as measured by the Kansas City Fed Labor Market Conditions Indicators (LMCI), can signal whether the current level of activity in labor markets is inflationary.

In 2025, it was estimated that over 163 million Americans were in some form of employment, while 4.16 percent of the total workforce was unemployed. This was the lowest unemployment rate since the 1950s, although these figures are expected to rise in 2023 and beyond. 1980s-2010s Since the 1980s, the total United States labor force has generally risen as the population has grown, however, the annual average unemployment rate has fluctuated significantly, usually increasing in times of crisis, before falling more slowly during periods of recovery and economic stability. For example, unemployment peaked at 9.7 percent during the early 1980s recession, which was largely caused by the ripple effects of the Iranian Revolution on global oil prices and inflation. Other notable spikes came during the early 1990s; again, largely due to inflation caused by another oil shock, and during the early 2000s recession. The Great Recession then saw the U.S. unemployment rate soar to 9.6 percent, following the collapse of the U.S. housing market and its impact on the banking sector, and it was not until 2016 that unemployment returned to pre-recession levels. 2020s 2019 had marked a decade-long low in unemployment, before the economic impact of the Covid-19 pandemic saw the sharpest year-on-year increase in unemployment since the Great Depression, and the total number of workers fell by almost 10 million people. Despite the continuation of the pandemic in the years that followed, alongside the associated supply-chain issues and onset of the inflation crisis, unemployment reached just 3.67 percent in 2022 - current projections are for this figure to rise in 2023 and the years that follow, although these forecasts are subject to change if recent years are anything to go by.

United States Inflation Nowcast: Contribution: Labour Market: Unemployment Insurance: Jobless Claims: Initial data was reported at 0.005 % in 12 May 2025. This stayed constant from the previous number of 0.005 % for 05 May 2025. United States Inflation Nowcast: Contribution: Labour Market: Unemployment Insurance: Jobless Claims: Initial data is updated weekly, averaging 0.003 % from Jun 2020 (Median) to 12 May 2025, with 259 observations. The data reached an all-time high of 0.742 % in 29 Mar 2021 and a record low of 0.000 % in 03 Jan 2022. United States Inflation Nowcast: Contribution: Labour Market: Unemployment Insurance: Jobless Claims: Initial data remains active status in CEIC and is reported by CEIC Data. The data is categorized under Global Database’s United States – Table US.CEIC.NC: CEIC Nowcast: Inflation: Headline.

United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll data was reported at 0.049 % in 12 May 2025. This stayed constant from the previous number of 0.049 % for 05 May 2025. United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll data is updated weekly, averaging 0.003 % from Jun 2020 (Median) to 12 May 2025, with 259 observations. The data reached an all-time high of 9.737 % in 29 Mar 2021 and a record low of 0.000 % in 21 Apr 2025. United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll data remains active status in CEIC and is reported by CEIC Data. The data is categorized under Global Database’s United States – Table US.CEIC.NC: CEIC Nowcast: Inflation: Headline.

Context

The Federal Reserve sets interest rates to promote conditions that achieve the mandate set by the Congress — high employment, low and stable inflation, sustainable economic growth, and moderate long-term interest rates. Interest rates set by the Fed directly influence the cost of borrowing money. Lower interest rates encourage more people to obtain a mortgage for a new home or to borrow money for an automobile or for home improvement. Lower rates encourage businesses to borrow funds to invest in expansion such as purchasing new equipment, updating plants, or hiring more workers. Higher interest rates restrain such borrowing by consumers and businesses.

Content

This dataset includes data on the economic conditions in the United States on a monthly basis since 1954. The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. The rate that the borrowing institution pays to the lending institution is determined between the two banks; the weighted average rate for all of these types of negotiations is called the effective federal funds rate. The effective federal funds rate is determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target. The Federal Open Market Committee (FOMC) meets eight times a year to determine the federal funds target rate; the target rate transitioned to a target range with an upper and lower limit in December 2008. The real gross domestic product is calculated as the seasonally adjusted quarterly rate of change in the gross domestic product based on chained 2009 dollars. The unemployment rate represents the number of unemployed as a seasonally adjusted percentage of the labor force. The inflation rate reflects the monthly change in the Consumer Price Index of products excluding food and energy.

Acknowledgements

The interest rate data was published by the Federal Reserve Bank of St. Louis' economic data portal. The gross domestic product data was provided by the US Bureau of Economic Analysis; the unemployment and consumer price index data was provided by the US Bureau of Labor Statistics.

Inspiration

How does economic growth, unemployment, and inflation impact the Federal Reserve's interest rates decisions? How has the interest rate policy changed over time? Can you predict the Federal Reserve's next decision? Will the target range set in March 2017 be increased, decreased, or remain the same?

The Federal Open Market Committee has been quickly raising the federal funds rate to lower inflation. However, services inflation remains high, supported by a tight labor market with high wage growth. Recent readings in the LMCI momentum indicator suggest monetary policy tightening is beginning to weigh on labor markets, which may eventually lead to lower services inflation and lower inflation overall.

United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll: Trade, Transpo & Utilities data was reported at 0.256 % in 12 May 2025. This stayed constant from the previous number of 0.256 % for 05 May 2025. United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll: Trade, Transpo & Utilities data is updated weekly, averaging 0.001 % from Jun 2020 (Median) to 12 May 2025, with 259 observations. The data reached an all-time high of 8.105 % in 10 May 2021 and a record low of 0.000 % in 13 Jan 2025. United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll: Trade, Transpo & Utilities data remains active status in CEIC and is reported by CEIC Data. The data is categorized under Global Database’s United States – Table US.CEIC.NC: CEIC Nowcast: Inflation: Headline.

This dissertation examines the complex interplay between monetary policy and economic dynamics across three pivotal essays, each focusing on distinct aspects of monetary policy's influence on labor markets, inflationary expectations, and the production sector's extensive margin.

The first chapter analyzes the varied effects of unexpected expansionary monetary policy shocks on high- and low-skilled workers using a New Keynesian DSGE model with asymmetric search and matching frictions. The findings show that unemployment rates for low-skilled workers are more sensitive to these shocks, while high-skilled workers recover faster. This underscores the importance of considering labor skill heterogeneity in devising optimal monetary policies, particularly regarding their effects on consumption, unemployment, and wage dynamics across skill levels.

The second chapter assesses the impact of the Federal Reserve's August 2020 policy framework revision on inflation, employing a representative agent New Keynesian model. Simulations of inflationary shocks under different policy rules indicate that a rule combining asymmetric output growth responses and average inflation targeting initially raises inflation more than the standard Taylor rule but stabilizes it more effectively in the medium term.

The third chapter explores how monetary policy influences the extensive margin of the production sector, specifically how changes in borrowing costs affect firm entry by productivity levels. Using a New Keynesian model that includes Hopenhayn's entry and exit framework, the study finds that while monetary policy reduces borrowing costs and modifies the equity-bond trade-off to facilitate firm entry, it may also inadvertently attract less efficient firms, thereby potentially neutralizing initial output gains.

These chapters collectively contribute to the understanding of the diverse effects of monetary policy on the economy, emphasizing the crucial roles of labor market frictions, inflation targeting, and borrowing costs. This analysis not only advances the existing literature but also provides important insights for policymakers striving to balance economic stability and growth.

United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll: Natural Resources & Mining data was reported at 0.003 % in 12 May 2025. This stayed constant from the previous number of 0.003 % for 05 May 2025. United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll: Natural Resources & Mining data is updated weekly, averaging 0.003 % from Jun 2020 (Median) to 12 May 2025, with 259 observations. The data reached an all-time high of 17.637 % in 17 Feb 2025 and a record low of 0.000 % in 03 Feb 2025. United States Inflation Nowcast: Contribution: Labour Market: Private Sector Payroll: Natural Resources & Mining data remains active status in CEIC and is reported by CEIC Data. The data is categorized under Global Database’s United States – Table US.CEIC.NC: CEIC Nowcast: Inflation: Headline.

Description:

This dataset provides key economic indicators from various countries between 2010 and 2023. The dataset includes monthly data on inflation rates, GDP growth rates, unemployment rates, interest rates, and stock market index values. The data has been sourced from reputable global financial institutions and is suitable for economic analysis, machine learning models, and forecasting economic trends.

Data Sources:

The data has been generated to simulate real-world economic conditions, mimicking information from trusted sources like: - World Bank for GDP growth and inflation data - International Monetary Fund (IMF) for macroeconomic data - OECD for labor market statistics - National Stock Exchanges for stock market index values

Columns:

1. Date: The specific date (in Year/Month/Day format) representing when the data was collected.
2. Country: The country the data pertains to (e.g., USA, Germany, Japan).
3. Inflation Rate (%): The rate of inflation for that country, showing how fast prices for goods and services are increasing.
4. GDP Growth Rate (%): The percentage growth of the country’s Gross Domestic Product (GDP), indicating economic expansion or contraction.
5. Unemployment Rate (%): The percentage of the working-age population that is unemployed.
6. Interest Rate (%): The central bank's interest rate, used to control inflation and influence the economy.
7. Stock Index Value: The value of the country’s main stock market index, reflecting the performance of the stock market.

Potential Uses: - Economic Analysis: Researchers and analysts can use this dataset to study trends in inflation, GDP growth, unemployment, and other economic factors. - Machine Learning: This dataset can be used to train models for predicting economic trends or market performance. Financial Forecasting: Investors and economists can leverage this data for forecasting market movements based on economic conditions. - Comparative Studies: The dataset allows comparisons across countries and regions, offering insights into global economic performance.

Data and codes to replicate results in "Optimal Currency Areas with Labor Market Frictions". Paper abstract: I study efficiency and optimal monetary policy in a two-country monetary union with frictional labor markets. With heterogeneity in labor market frictions, the constrained efficient allocation generically cannot be achieved even if productivity shocks affecting each country are the same. The second-best optimal policy targets smaller inflation and output gaps in the more sclerotic labor market. A quantitative calibration to the Eurozone implies welfare gains from redefining the union's inflation target to put more weight on its sclerotic members.

Worker mobility played a key role in shaping inflation dynamics during the Great Recession and COVID-19 recoveries.

The U.S. labor market has cooled over the last two years but remains healthy overall. However, an industry-specific version of the KC Fed’s Labor Market Conditions Indicators (LMCI) suggests pockets of tightness and weakness have appeared in a few industries. Tightness appears to be limited to less labor-intensive industries, limiting upside risk to inflation. Weakness, on the other hand, has appeared in the interest-rate-sensitive information industry, which may be vulnerable to further labor market cooling.

U.S. Economic and Financial Dataset

Dataset Description

This dataset combines historical U.S. economic and financial indicators, spanning the last 50 years, to facilitate time series analysis and uncover patterns in macroeconomic trends. It is designed for exploring relationships between interest rates, inflation, economic growth, stock market performance, and industrial production.

Key Features

• Frequency: Monthly
• Time Period: Last 50 years from Nov-24
• Sources:
  • Federal Reserve Economic Data (FRED)
  • Yahoo Finance

Dataset Feature Description

1. Interest Rate (Interest_Rate):

   • The effective federal funds rate, representing the interest rate at which depository institutions trade federal funds overnight.

2. Inflation (Inflation):

   • The Consumer Price Index for All Urban Consumers, an indicator of inflation trends.

3. GDP (GDP):

   • Real GDP measures the inflation-adjusted value of goods and services produced in the U.S.

4. Unemployment Rate (Unemployment):

   • The percentage of the labor force that is unemployed and actively seeking work.

5. Stock Market Performance (S&P500):

   • Monthly average of the adjusted close price, representing stock market trends.

6. Industrial Production (Ind_Prod):

   • A measure of real output in the industrial sector, including manufacturing, mining, and utilities.

Dataset Statistics

1. Total Entries: 599
2. Columns: 6
3. Memory usage: 37.54 kB
4. Data types: float64

Feature Overview

• Columns:
  • Interest_Rate: Monthly Federal Funds Rate (%)
  • Inflation: CPI (All Urban Consumers, Index)
  • GDP: Real GDP (Billions of Chained 2012 Dollars)
  • Unemployment: Unemployment Rate (%)
  • Ind_Prod: Industrial Production Index (2017=100)
  • S&P500: Monthly Average of S&P 500 Adjusted Close Prices

Executive Summary

This project explores the interconnected dynamics of key macroeconomic indicators and financial market trends over the past 50 years, leveraging data from the Federal Reserve Economic Data (FRED) and Yahoo Finance. The dataset integrates critical variables such as the Federal Funds Rate, Inflation (CPI), Real GDP, Unemployment Rate, Industrial Production, and the S&P 500 Index, providing a holistic view of the U.S. economy and financial markets.

The analysis focuses on uncovering relationships between these variables through time-series visualization, correlation analysis, and trend decomposition. Key findings are included in the Insights section. This project serves as a robust resource for understanding long-term economic trends, policy impacts, and market behavior. It is particularly valuable for students, researchers, policymakers, and financial analysts seeking to connect macroeconomic theory with real-world data.

Potential Use Cases

• Economic Analysis: Examine relationships between interest rates, inflation, GDP, and unemployment.
• Stock Market Prediction: Study how macroeconomic indicators influence stock market trends.
• Time Series Modeling: Perform ARIMA, VAR, or other models to forecast economic trends.
• Cyclic Pattern Analysis: Identify how economic shocks and recoveries impact key indicators.

Snap of Power Analysis

https://github.com/user-attachments/assets/1b40e0ca-7d2e-4fbc-8cfd-df3f09e4fdb8">

To ensure sufficient power, the dataset covers last 50 years of monthly data i.e., around 600 entries.

Key Insights derived through EDA, time-series visualization, correlation analysis, and trend decomposition

• Interest Rate and Inflation Dynamics: The interest Rate and inflation exhibit an inverse relationship, especially during periods of aggressive monetary tightening by the Federal Reserve.
• Economic Growth and Market Performance: GDP growth and the S&P 500 Index show a positive correlation, reflecting how market performance often aligns with overall economic health.
• Labor Market and Industrial Output: Unemployment and industrial production demonstrate a strong inverse relationship. Higher industrial output is typically associated with lower unemployment
• Market Behavior During Economic Shocks: The S&P 500 experienced sharp declines during significant crises, such as the 2008 financial crash and the COVID-19 pandemic in 2020. These events also triggered increased unemployment and contractions in GDP, highlighting the interplay between markets and the broader economy.
• Correlation Highlights: S&P 500 and GDP have a strong positive correlation. Interest rates negatively correlate with GDP and inflation, reflecting monetary policy impacts. Unemployment is negatively correlated with industrial production but positively correlated with interest rates.

Link to GitHub Repo

https:/...

Unemployment Rate in the United States increased to 4.40 percent in September from 4.30 percent in August of 2025. This dataset provides the latest reported value for - United States Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

In 2024, the employment-to-population ratio worldwide was estimated to be approximately ** percent, indicating that nearly ** percent of the global population above 15 years was employed. Among the provided regions, Africa had the highest employment-to-population ratio, at ** percent, with Europe and Central Asia having the lowest at ** percent. Global income growth As greater portions of the population hold stable employment over time, income has also grown globally. From 1970 until today, North America has seen the largest increase in net national incomes per capita, but this increase has occurred in other regions as well. In terms of real wages, while they have grown over time, they have experienced a slight decrease in light of the high global inflation rates. Decrease in child labor Even though greater proportions of the population are employed, child labor has decreased over time. In 2000, there were *** million children working, which has decreased to *** million by 2020. The majority of working children are in the agricultural sector, especially younger children within the 5-11 and 12-14 age groups.