An indicator of resource utilisation

Date 13/10/2010

Economic commentary: An indicator of resource utilisation

Our view of resource utilisation plays a central role in the analysis of how monetary policy should be formulated. However, measuring resource utilisation is difficult in several ways. It cannot be observed directly in the data and there is no established method for measuring it. This makes it important to study a number of different measures. This commentary presents a method of summarising the information in survey data and labour market data. The indicator so produced – designated the RU indicator – captures economic developments well. The advantages of the RU indicator are that it is not revised particularly extensively when new information is received and it can be updated rapidly. The RU indicator could thus form a good complement to other measures of resource utilisation, although it should be pointed out that it does not show the Riksbank’s collected assessment.