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

Abstract

This paper measures how much state labor-market variation the Federal Reserve’s twelve-district geography preserves and averages away. I compare monthly state-supported district means with an independently constructed national labor-market gap from 2001 through 2025. Districts average away slightly more state dispersion than they preserve, while centering accounts for less than one percent. Three procedures for constructing connected regions put the median retained share at 45.6 to 52.5 percent when there are twelve regions, bracketing the 48.9 percent retained by a whole-state Federal Reserve analogue. The loss is geographically concentrated: San Francisco, Chicago, and Richmond account for over two-thirds of within-district loss on about two-fifths of labor-force weight, with essentially the same concentration before 2020.

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},
  }