The Conference Board Employment Trends Index™ (ETI) Increased in July

The Conference Board Employment Trends Index™ (ETI) Increased in July

Strong Job Growth to Continue in Coming Months

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NEW YORK, August 9, 2021…The Conference Board Employment Trends Index™ (ETI) increased again in July, the fifth consecutive monthly increase. The index now stands at 109.80, up from 108.96 (a downward revision) in June.

“The Employment Trends Index remained on its historically strong upward trajectory, suggesting rapid job growth is likely to continue over the next several months,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “This high mark comes off the back of nearly 1 million new jobs added in both June and July and a steep decline in the unemployment rate. However, recruiting and retention difficulties—and rapid wage growth—are expected through the summer, particularly in industries key to the reopening of the economy, such as food service and leisure and hospitality. The rapid wage growth is likely to lead to higher inflation in the coming year.”

Levanon added: “Despite the still-high unemployment rate, many employers are having difficulty finding qualified workers. According to the National Federation of Independent Business, 49 percent of firms reported being unable to fill open positions in July—an all-time high. For many of those currently unemployed, job-search intensity remains low due to an array of factors: enhanced unemployment benefits, fears of getting infected, a lack of childcare, and interest in pursuing and preparing for a different type of career. Going forward, we do expect economic activity in in-person services to be negatively impacted by the current resurgence of infections fueled by the “delta” variant. While this delta wave may produce slight slowdowns in hiring, we expect job growth to remain very strong overall.”

July’s increase in the Employment Trends Index was driven by positive contributions from seven of eight components. From the largest positive contributor to the smallest, the components were: Industrial Production; Percentage of Firms With Positions Not Able to Fill Right Now; Real Manufacturing and Trade Sales; Ratio of Involuntarily Part-time to All Part-time Workers; Job Openings; Number of Temporary Employees; and Initial Claims for Unemployment Insurance. The one remaining indicator, Percentage of Respondents Who Say They Find “Jobs Hard to Get”, was unchanged from June.

The Employment Trends Index is a leading composite index for employment. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months. 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 labor market indicators 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 month 

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.

About The Conference Board 

The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.

Index Release Date (10 AM ET) - Data for the Month 

Tuesday, September 7* - August
Monday, October 11 - September
Monday, November 8 - October
Monday, December 6 - November

* Tuesday release due to holiday