Measuring the Strength of the Labor Market An Update to Our Slack Tracker

Goldman Sachs has updated its labor market slack tracker to 4.8%, suggesting that current labor market conditions are softer than the headline 4.3% unemployment rate implies. Despite this, the firm expects only a marginal rise in the unemployment rate to a peak of 4.4% for the year.

Key Takeaways

• 1.The updated labor market slack tracker stands at 4.8%, indicating the labor market is softer than the unemployment rate suggests.
• 2.Despite signs of softness, the labor market has stabilized recently, with unemployment currently averaging 4.3%.
• 3.Goldman Sachs expects the unemployment rate to rise by 0.1pp further this year to a peak of 4.4%.

Table of Contents

• Measuring the Strength of the Labor Market: An Update to Our Slack Tracker
• The US Economics Team
• Disclosure Appendix