Abstract: Economic uncertainty has far-reaching impacts on both macroeconomic fluctuations and household decisions. In the complex international and domestic environment of increasing uncertainty in economic policies, geopolitics, and public events, how to maintain stability in the job market under the impact of uncertainty is of great significance. Based on the consideration of price stickiness and labor market friction, a dynamic stochastic general equilibrium model is constructed to introduce labor intensity and endogenous selection mechanisms for enterprises in response to China’s economic facts. From the perspectives of actual data and equilibrium models, the impact of economic uncertainty on the labor market and macroeconomic fluctuations is effectively identified and analyzed. The research results indicate that economic uncertainty shocks have significant negative impacts on macroeconomics, labor market matching, and job search success rates. Rising uncertainty is an important source of job market volatility, both wage stickiness and high unemployment insurance levels can amplify the impact of uncertainty. Further analysis reveals that labor market friction is a key factor affecting the magnitude of uncertainty shocks, and that adopting policies to stabilize the unemployment rate can alleviate the impact of uncertainty, but at the same time, it may also put the government in a dilemma of stabilizing the labor unemployment gap and promoting real output growth.

Key words: economic uncertainty, unemployment rate, dynamic stochastic general equilibrium model, supply and demand in the labor market