A new labor market indicator from LinkedIn outperforms the government's standard measure in predicting both wage and price inflation, according to a study published October 30 by researchers at the Federal Reserve Bank of New York. The Jobs per Jobseeker Index, which tracks attractive job postings divided by active applicants on the platform, had lower forecasting errors than the widely used vacancies-to-unemployment ratio for both consumer price and employment cost inflation. The findings suggest the LinkedIn measure could help policymakers anticipate inflation trends more accurately and with less delay than traditional data sources.
The researchers tested three LinkedIn measures against conventional benchmarks from July 2019 through April 2026. The Jobs per Jobseeker Index showed a correlation of 0.733 with the vacancies-to-unemployment ratio, though it ran slightly higher than the standard measure in the early pandemic period and slightly lower from late 2022 to mid-2024. The LinkedIn Hiring Rate, which tracks members who added new employers to their profiles, correlated at 0.95 with the government's hires rate when measured from early 2021 onward. In nowcasting exercises that predict current inflation before official data arrive, the Jobs per Jobseeker Index achieved the lowest error rates for both consumer price and employment cost measures. The third indicator tested, the Jobs per Application Index, consistently performed worse than the standard vacancies-to-unemployment ratio.
The study defines an attractive job opening as one where the employer either paid to promote the listing or manually posted it on LinkedIn, and the position received at least one application from a member in that labor market within a set timeframe. Applications include both those submitted through LinkedIn's Easy Apply feature and those inferred when a member clicked a link to apply outside the platform. The researchers note that all three LinkedIn measures have "the advantage of being timelier than standard measures," with August data potentially available in the first week of September compared to the roughly five-week lag for Job Openings and Labor Turnover Survey data. However, they acknowledge the measures "are not necessarily representative of the U.S. economy as a whole, since they capture only jobs posted and applied to on LinkedIn."
Labor market tightness describes how hard it is for companies to find workers, with tighter conditions signaling fewer job seekers relative to openings and creating upward pressure on wages as employers compete for scarce talent. The Jobs per Jobseeker Index's superior performance stems from its ability to capture real-time application behavior that leads inflation rather than lagging behind it. The researchers evaluated predictive power using root mean squared error, comparing how closely each measure's inflation predictions matched actual results in rolling regressions. Because strong labor market tightness measures are crucial for calibrating monetary policy, the timing advantage matters—the Federal Reserve and other policymakers could gain weeks of advance warning about inflationary pressures. The LinkedIn Hiring Rate also beat the standard ratio for consumer price forecasting, though it fell short on employment cost predictions.
The report concludes that both the Jobs per Jobseeker Index and the LinkedIn Hiring Rate "not only track existing measures of LMT well, but also have a RMSE that is comparable to or better than existing, trusted LMT measures like V/U in nowcasting and forecasting price and wage inflation." Crucially, these indicators arrive faster than traditional government data while maintaining or improving accuracy. For policymakers trying to stay ahead of inflation trends, that combination of speed and precision could prove valuable—especially when every week of advance notice helps shape interest rate decisions that affect millions of workers and businesses.