The European Central Bank has published research in its Economic Bulletin describing a new euro area labour demand indicator derived from textual analysis of corporate earnings call transcripts and using it to nowcast and forecast the euro area job vacancy rate. The results suggest labour demand has been cooling since peaking in the first half of 2022 and that the job vacancy rate is likely to decline modestly over coming quarters. The indicator is built from roughly 600 earnings calls per quarter by euro area-headquartered listed firms, counting sentences that include keywords linked to pressures from unmet labour demand. It closely tracks the euro area job vacancy rate, with a correlation of around 0.9, and is used in a mixed data sampling regression framework to produce nowcasts and forecasts up to two quarters ahead. Across model specifications, the job vacancy rate is projected to be around 2.5% in the first and second quarters of 2025, before a marginal decline towards 2.4% in the third quarter of 2025, with the range of outcomes broadly balanced around the mean. Alternative high-frequency signals from Indeed job postings show a steady decline in listed vacancies since late 2023 and point to forecasts broadly aligned with the earnings call-based results in the short term.
European Central Bank 2025-03-20
European Central Bank research uses earnings call transcripts to track euro area labour demand and forecasts job vacancy rate to edge down to about 2.4% by Q3 2025
The European Central Bank's Economic Bulletin introduces a new euro area labour demand indicator from corporate earnings call transcripts to nowcast and forecast the job vacancy rate. Findings indicate cooling labour demand since early 2022, with the job vacancy rate projected to decline modestly from 2.5% in early 2025 to 2.4% by the third quarter. Alternative data from Indeed job postings corroborate these forecasts, showing a steady decline in vacancies since late 2023.