Millions of gig workers may be omitted from the U.S. government's employment report each month, creating implications for how the Federal Reserve assesses the job market and associated inflation risks 

Research presented at a Boston Federal Reserve labor market conference suggests that casual contract workers, including those driving for Uber or taking piecework jobs in retirement, may not perceive themselves as "employed 

The undercount of gig workers in surveys could range from a few hundred thousand to as many as 13 million, potentially influencing the reported share of the adult population working at least part-time by up to 5 percentage points 

Despite the potential undercount, researchers argue that the labor market may be "tighter" than believed, suggesting the economy has room to increase work and production without generating inflation 

The study proposes that the benchmark for full employment could be adjusted upward, as inflation did not accelerate significantly, even with substantial hidden informal work documented before the coronavirus pandemic 

Detailed responses to a New York Fed survey on "informal work" from 2015 through 2022 revealed discrepancies in tracking gig work compared to the Labor Department's monthly survey of employment status, indicating a significant data gap 

Over the last decade, economists have debated the connection between low unemployment, rising wages, and inflation. The research challenges the idea that inflation is primarily driven by low unemployment 

Fed Chair Jerome Powell and other officials still see a connection between the jobless rate and inflation, emphasizing the need for increased labor market "slack" to control inflation 

Recent projections by Fed officials indicate a shift in their view of the "longer-run" unemployment rate, from 5.0-6.0% in 2013 to 3.5-4.3% in September, raising questions about the potential for a perpetual labor shortage 

The research suggests untapped labor supply among gig workers, indicating that potential hours and GDP might have been higher in recent years compared to official employment estimates