One Nation, Under Aggregation: Twelve Federal Reserve Districts and the National Labor-Market Summary

Abstract

A single national labor-market statistic is well centered on conditions across the 50 states and the District of Columbia, but much of their variation disappears in the national summary. The Federal Reserve’s twelve districts offer an existing layer between individual state signals and the national aggregate. I ask how much state variation those district summaries preserve and how much they still average away. Using monthly unemployment and vacancy data from 2001 through 2025, I construct comparable labor-market gaps and separate variation lost within districts from variation remaining between them. District summaries preserve substantial differences across places, but slightly more state variation is lost within districts than remains visible between them. The remaining mismatch is economically material, widens during periods of stress, and persists in ordinary times. A well-centered national statistic does not remove the need for regional information.

Citation

Pusateri, Nicholas R. 2026. “One Nation, Under Aggregation: Twelve Federal Reserve Districts and the National Labor-Market Summary.” Working Paper. URL: https://nicpusateri.com/one-rule.

@article{pusateri2026one,
  title={One Nation, Under Aggregation: Twelve Federal Reserve Districts and the National Labor-Market Summary},
  author={Pusateri, Nicholas R.},
  journal={Working Paper},
  year={2026},
  url={https://nicpusateri.com/one-rule},
  }