The Kansas City Fed Labor Market Conditions Indicators (LMCI) suggest the level of activity declined slightly, and momentum decelerated in March. The level of activity declined by 0.04, from 0.48 to 0.44, remaining above its historical average. The momentum indicator decreased by 0.49, from −0.30 to −0.79. After remaining around zero for the past two years, momentum has experienced notable declines since January, falling to its lowest level since June 2020.
The first column of the table below shows the labor market variables that made the largest contributions to the 0.04 decline in the activity indicator this month. Overall, 10 variables made a positive contribution to the change in the activity indicator, five variables made no contribution, and nine variables made a negative contribution. The largest positive contributor to the change in the level of activity was the percent of firms with positions not able to fill right now from the National Federation of Independent Business (NFIB) survey. In March, 40 percent of firms had job openings that they could not fill, up from 38 percent in February. The largest negative contributor to the change in the level of activity was the percent of firms planning to increase employment (NFIB). In March, 12 percent of firms planned to increase employment, down from 15 percent in February.
The KC Fed LMCI suggests the level of activity declined slightly and momentum decelerated in March
The level of activity declined by 0.04, from 0.48 to 0.44, remaining above its historical average. The momentum indicator decreased by 0.49, from −0.30 to −0.79.