The Conference Board Employment Trends Index™ (ETI) A Positive Outlook for Job Growth

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

A Positive Outlook for Job Growth

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The Conference Board Employment Trends Index™ (ETI) increased slightly in November. The index now stands at 114.49, up from 113.03 in October (an upward revision).

“The Employment Trends Index continues to advance steadily, suggesting a decent outlook for job growth over the next several months,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “In that context, November’s disappointing payrolls growth may be an outlier rather than a new trend. Of course, this is contingent on the emerging Omicron variant—a new wildcard that threatens to extend COVID-19’s impacts on job growth beyond Delta.”

“On its current trajectory, much of the job growth ahead should come from sectors still in the process of reopening, including restaurants, hotels, entertainment, personal services, and passenger transportation. These industries are relatively labor intensive, so their further recoveries will be key for sustaining strong job growth. At the same time, labor supply will struggle to meet the demand for workers, as the US working-age population stagnates and Baby Boomers drop out of the workforce. We currently project the unemployment rate—already down to 4.2 percent—to approach 3.0 percent by the end of 2022, which would mark a 70-year low. Indeed, even if pandemic disruptions to labor supply fully subside in the year ahead, a tight labor market is likely here for the foreseeable future. Employers should expect recruiting difficulties and quit rates to remain high, fueling the upward pressure on wages.”

November’s increase in the Employment Trends Index was driven by positive contributions from six of eight components. From the largest positive contributor to the smallest, these were: Initial Claims for Unemployment Insurance; Industrial Production; Ratio of Involuntarily Part-time to All Part-time Workers; Job Openings; Number of Temporary Employees; and Real Manufacturing and Trade Sales. The two components that made negative contributions in November were Percentage of Firms With Positions Not Able to Fill Right Now 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 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