The Conference Board Employment Trends Index (ETI) increased in July to 115.45, compared to 113.56 points in June. The Employment Trends Index is a leading composite index for employment. When the Index increases, it is likely that employment will also increase, and vice versa. Turning points in the Index indicate that a change in the trend of job creation or loss is about to occur in the coming months.
“The ETI increased in July after two months of decline, indicating a Continued job growth in the coming monthssaid Selcuk Eren, a senior economist at The Conference Board.
“The Index peaked in March 2022 and has been on a slow downward trend since then, but remains elevated and notably above pre-pandemic levels. We expect positive job growth in the coming months, even if the rate slows. With continued strength in the labor market and strong wage growth, we anticipate that the Federal Reserve will raise target interest rates once againEren explained.
The Conference Board points out that for the moment the labor market is still tight, and that the Consumer Confidence Survey suggests that workers are very optimistic about employment conditions: “In July, the proportion of consumers who said jobs are ‘hard to get’ dropped to single digits.
The think tank providing insight into what’s to come noted that initial claims for unemployment insurance and involuntary part-time workers are very low: “Job offers, while trending downward, remain high compared to pre-pandemic levelswhich indicates a continued tightness of the labor market”.
On the other hand, the number of employees working in temporary help services, an important early indicator for hiring in other industries, has been declining since peaking in March 2022, which suggests slower job gains and eventually job losses.
“Looking ahead, we expect the Fed rate hikes to have a measurable impact on job growth, with job losses likely in early 2024. As a result, we forecast the unemployment rate to start rising to 4.2% by mid-2024, corresponding to around 700,000 jobs lost. However, we anticipate that jobs will recover quickly and tight labor markets will return in late 2024.”
The July Rise in the Employment Trends Index was driven by positive contributions from four of its eight constituents: Percentage of respondents who say they find “hard-to-get jobs”, ratio of involuntary part-timers to all part-timers, initial claims for unemployment Insurance and job offers.
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