The Employment Trends Index™ (ETI) Decreased in February

Index Signals Job Growth Slowdown in Coming Months

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The Conference Board Employment Trends Index™ (ETI) decreased in February to 112.29, from a downwardly revised 113.18 in January. 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 decreased in February after two consecutive months of modest increases,” said Will Baltrus, Associate Economist at The Conference Board. “The ETI has been trending downward since hitting a peak in March 2022. While the Index is still elevated compared to its prepandemic level and the economy has continued to add jobs through February 2024,the labor market is likely to cool off, with modest job gains expected through Q3 and Q4 of 2024.

Baltrus added: “February’s payroll gains were again concentrated in healthcare and social assistance, leisure and hospitality, and government—accounting for 73% of jobs added. Apart from these sectors, job growth broadened for the third straight month, with modest growth in construction, retail trade, and transportation and warehousing. However, other labor market gauges were weaker in the month. The unemployment rate rose in February to 3.9%, but increases were concentrated among younger workers, especially those aged 16-24. This is reflected in initial claims for unemployment insurance, which rose for the second consecutive month. Temporary help services—an early indicator for hiring in other industries and a component of the ETI—lost jobs in February, continuing the declines observed since April 2022. Furthermore, consumers saying jobs were ‘hard to get’ in our Consumer Confidence Survey®—another component of ETI—edged up again, following an upward revision in January 2024. Looking ahead, we continue to project slower real GDP growth in Q2 and Q3 which may dampen demand, but not extensively given ongoing labor supply issues linked to labor shortages in key sectors."

February’s decrease in the Employment Trends Index was driven by negative contributions from four of its eight components: Percentage of Respondents Who Say They Find “Jobs Hard to Get”, Percentage of Firms with Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, and Initial Claims for Unemployment Insurance.

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.

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The Conference Board Employment Trends Index™ and turning points, November 1973 to Present