Abstract
This paper examines whether sell-side equity analysts use labor market information, as reflected in job postings and corporate layoffs, to improve the quality of their earnings forecasts. We posit that labor market activities contain useful incremental information about the related firm and the local economy, which may not be readily available through other sources. Consistent with this conjecture, we demonstrate that both job postings and corporate layoffs contain information about future earnings and the local economy. Sell-side analysts utilize this information to improve their forecasts, where mid-level managerial job postings have greater impact on forecast quality than rank-and-file job postings. Local analysts benefit more from labor market information