The Federal Reserve Bank of Chicago is turning to a new way of tracking the labor market, blending traditional government statistics with private, real-time data in an effort to better anticipate shifts in employment. It has unveiled a labor market indicator that merges figures from the U.S. Bureau of Labor Statistics with a wide range of private-sector sources, including ADP, Bloomberg, The Conference Board, Google, Haver Analytics, Indeed, Lightcast, and Morning Consult. The experimental tool produces probabilistic projections of where the official unemployment rate will land; the first release suggests a 71% chance that September’s number will come in within 10 basis points of August’s reading of 4.3%.
Chicago Fed President Austan Goolsbee said that the effort is an attempt to give policymakers and markets more timely insight. “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,” Goolsbee told Reuters.
The move aligns the Chicago Fed with other regional branches, such as the Atlanta Fed, which has long run near-term models for GDP and inflation and also publishes indexes that track commercial real estate markets using datasets from CoStar alongside federal numbers.
The effort comes at a moment when the reliability of government data itself has been under scrutiny. The Financial Times reported that attacks on federal statistics during the Trump administration, coupled with funding and staffing cuts at agencies like the BLS, have contributed to skepticism about neutrality. “We’ve always sort of taken for granted that we didn’t have to worry about the confidence of the government data because it set the standard for neutrality and reliability,” Derek Tang, an economist at LHMeyer, told the FT. “That credibility is being impugned, whether fairly or not, right now.”
Business leaders echoed the need to diversify data sources. JPMorgan Chase CEO Jamie Dimon said in a recent television interview that while government reports remain important, his bank supplements them extensively with alternative measures such as delinquency, trade and cross-border economic data. But the growing reliance on private information also raises questions about access. Joe Brusuelas, chief economist at consultancy RSM, warned that competition for proprietary data “will over time create a widening gap between the haves and the have-nots,” further tilting advantages toward well-capitalized firms.
The problems extend beyond labor or inflation figures. As GlobeSt.com reported in May, the Trump administration’s decision to shutter the Energy Star program eliminated the country’s largest repository of environmental performance data.
“That was essential info for things like calculating carbon emissions,” Matt Ellis, chief executive of Measurabl, told GlobeSt.com. Ellis noted that many in the market now wonder whether such datasets should be reconstructed — and if so, whether the government or the private sector will shoulder the responsibility.
For now, the Chicago Fed’s new initiative highlights both the potential and the limitations of real-time modeling. While private sources can help fill gaps, the absence of trusted, universally available public data leaves open the question of how long such efforts can compensate for a weakening federal statistical infrastructure.
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