Growth in The Conference Board Employment Trends Index™ (ETI) Slowed in August

Growth in The Conference Board Employment Trends Index™ (ETI) Slowed in August

Delta variant is decelerating the labor market recovery

The Conference Board Employment Trends Index™ (ETI) increased for the sixth consecutive month in August, though the rate of increase has fallen. The index now stands at 110.37, up from 109.89 in July.

“The growth rate of the Employment Trends Index slowed in the past two months, reflecting the Delta variant’s impact on economic activity, especially in in-person services,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “We continue to monitor two trends which could put a damper on employment growth. First, the number of new COVID-19 infections continues to increase, holding back economic and job market recovery.  

“Second, the labor market continues to experience historical recruiting difficulties. According to a survey of the National Federation of Independent Business, 50 percent of small employers reported difficulty filling positions in August, an all-time high accompanied by rapidly rising wages. Towards the end of 2021, these severe labor shortages may ease as enhanced unemployment benefits expire and schools reopen, leading more workers to return to the labor market. We expect another month of subpar job growth in September, but strong job growth is likely resume in the last quarter of 2021. Since COVID-19 is not going away anytime soon, a return to normal spending on, and employment in, in-person services is unlikely to happen in 2021.”

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

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 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