US LABOR MARKET: New Chicago Fed Indicators Show Steady Unemployment In Sept

The Chicago Fed this week officially launched its real-time unemployment rate forecast. 

• The "Advance" Chicago Fed Labor Market Indicators report (it is released twice a month ahead of the nonfarm payrolls report) currently shows a 4.32% unemployment rate for September, which would be unchanged from August (albeit a small decline on an unrounded basis, from 4.324%). The final release will be published on Thursday Oct 3 - the day before the September nonfarm payrolls report.
• The unemployment rate forecast includes a combination of job-finding and job separations rates, based on real-time data. That data includes: initial and continuing jobless claims, Google Trends unemployment topic index, Bloomberg consensus for unemployment, Morning Consult's indices, JOLTS, the Conference Board's labor market differential, and Indeed / ADP / Lightcast-based job openings rates.
• Per the Chicago Fed, the model then relates changes in the flow-consistent unemployment rate (the ratio of the job separations rate to the sum of the job finding and job separations rates) to changes in the BLS's unemployment rate to produce a BLS unemployment rate forecast.
• Based on the real-time data above, the Chicago Fed sees layoffs and other separations steady at 2.09% and the hiring rate for unemployed workers ticking up to 45.61% from 45.49%. The latter implies a very small dip in the overall unemployment rate in September.
• It reports probabilities of possible values to be published in the upcoming Employment report: it shows a roughly one-in-three chance that the unemployment rate will fall from 4.3%, with 28% prob of no change and ~40% of an increase of 0.1pp or more.