Employment Trends Index™ (ETI) Increased in December

Index Signals Job Growth to Continue in Early 2024

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The Conference Board Employment Trends Index™ (ETI) increased in December to 113.15, up from a downwardly revised 112.48 in November. The Employment Trends Index is a leading composite index for employment. When the Index increases, employment is likely to grow as well, and vice versa. Turning points in the Index indicate that a change in the trend of job gains or losses is about to occur in the coming months.

“The ETI went up slightly in December, signaling employment will continue to grow in early 2024," said Selcuk Eren, Senior Economist at The Conference Board. “The index has been on a gradual decline since its peak in March 2022, yet it remains notably above pre-pandemic levels. This suggests continued job additions in early 2024, albeit at a decelerated pace. We project a short and shallow recession starting in H1 2024 and negative payroll prints in the second part of the year.”

Eren added: “For now, the labor market continues to add jobs. Most CEOs said they are either expecting to continue hiring or keep their existing workforce whereas only 13% expect to cut workers within the next 12 months according to The Conference Board Measure of CEO Confidence™ for the US.

“However, over the past six months, payroll gains have been predominantly driven by healthcare and social assistance, leisure and hospitality, and government. It is unlikely that gains in these sectors alone can keep payroll positive going forward. Employment in other industries was either flat or declined slightly. Employment in temporary help services—an early indicator for hiring in other industries and part of the ETI—has been declining since November 2022. Other indicators including job openings, hirings, and voluntary quits all point to a softening labor market. Our latest US forecast sees the unemployment rate rising to 4.3% by the end of 2024, corresponding with about 600,000 job losses. However, we expect the recession to be short-lived and jobs to quickly recover by the end of 2024."

December’s increase in the Employment Trends Index was driven by positive contributions from four of its eight components: Percentage of Respondents Who Say They Find “Jobs Hard to Get”, Initial Claims for Unemployment Insurance, Real Manufacturing and Job Openings.

The Employment Trends Index aggregates eight leading indicators of employment, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

The Conference Board Employment Trends Index ™, January 2000 to Present       

The eight leading indicators of employment aggregated into the Employment Trends Index include:

• Percentage of Respondents Who Say They Find “Jobs Hard to Get” (The Conference Board Consumer Confidence Survey^®)

• Initial Claims for Unemployment Insurance (U.S. Department of Labor)

• Percentage of Firms with Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
• Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
• Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
• Job Openings (BLS)*
• Industrial Production (Federal Reserve Board)*
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**

*Statistical imputation for the recent month

**Statistical imputation for two most recent months

The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET, on the Monday that follows each Friday release of the Bureau of Labor Statistics Employment Situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.