The Trendy New Labor Market Indicator Everybody Is Talking About Just Got Updated

There's a new cool economic report: the Labor Market Conditions Index, or LMCI.

The latest LMCI, released on Monday, increased to 2.5 in September from 2 in August, but indicates that labor market conditions remain broadly stronger.

Here's a chart of the latest LMCI:

The index was first "made famous" by Fed Chair Janet Yellen in her speech at Jackson Hole, when she said, "This broadly based metric supports the conclusion that the labor market has improved significantly over the past year, but it also suggests that the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions."

Recall that at Jackson Hole, Yellen spoke about the labor market puzzle of a steadily declining unemployment rate and strong payroll gains against the backdrop of declining labor force participation and flat wages.

At the time, Yellen said, "There is no simple recipe for appropriate policy in this context," and Friday's jobs report largely reaffirmed this outlook.

On Friday, the latest jobs report showed that nonfarm payrolls grew by 248,000, the unemployment rate fell to 5.9%, while wages were flat month-over-month and the labor force participation fell to its lowest level since 1978.

Here's the full table of the components included in the LMCI.