Palanor: US Jobs Health

## What this measures

This index tracks the health of the US labor market by combining measures of hiring activity, worker separations, and compensation growth into a single score.

## Background

The American labor market is over-described and under-read. Headline unemployment misses half the story; payrolls miss the other half. This index reads jobs across three dimensions simultaneously: hiring (openings, payrolls), separation (quits, jobless claims), and compensation (wage growth, real income).

The weighting balances them. The result is a 0–100 score where: - 0.0–0.2: distressed (high unemployment, falling wages, hiring collapse) - 0.2–0.4: weakening - 0.4–0.6: balanced — the canonical "soft landing" reading - 0.6–0.8: tight (low unemployment, accelerating wages, quits rising) - 0.8–1.0: overheating, late-cycle risk

The index is forward-looking by construction. Quits rates lead unemployment by 6–9 months; wage growth lags by 3–6 months. Reading them together gives the regime, not just the snapshot.

## Why it matters

Labor conditions set the pace of wage inflation, limit or expand the talent pool, and signal whether the economy is cooling or running hot. Organizations that staff, budget payroll, or plan around consumer spending need a consolidated read on whether hiring is getting easier or harder and whether compensation pressure is rising or falling.

## How to read it

The index runs from zero to one. A score near zero indicates distress; near one indicates overheating. Movement toward zero signals weakening hiring, falling quits, and slowing wage growth; movement toward one signals tightening conditions, rising quits, and accelerating compensation.

## What it does not say

The index does not forecast recessions, predict Federal Reserve policy, or tell you whether a specific occupation or region is tightening. It describes the aggregate labor regime, not the availability of particular skills or the trajectory of individual components.

## Source

Palanor constructs this index from seven signals published by the Federal Reserve Economic Data system and the Federal Reserve Bank of Atlanta. The components are transformed to comparable scales, weighted, and combined into a composite score.