The Conference Board Employment Trends Index™ (ETI) Declined in January

ETI Dipped Modestly in January

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NOTE: This month’s release will incorporate annual revisions of standardization factors to the Employment Trends Index, which bring it up to date with revisions in the source data. These revisions do not change the cyclical properties of the index. The standardization factors, known as volatility adjustment factors, are done by calculating the standard deviation of the monthly percent change in each component. The updated period used for calculating the standardization factors is November 1973 to December 2023. The standardization factors are then used to construct the index from November 1973 to present. As a result, the revised index, in levels and month-on-month changes, is not directly comparable to those issued prior to this annual revision. For more information, please visit our website at http://www.conference-board.org/data/eti.cfm. 

The Conference Board Employment Trends Index™ (ETI) declined in January to 108.35, from a downwardly revised 109.23 in December. The Employment Trends Index is a leading composite index for payroll 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 ticked down in January after three consecutive monthly gains,” said Mitchell Barnes, Economist at The Conference Board. “The Index has largely moved sideways since late summer, consistent with a range of indicators that suggest that the trend of normalization is slowing but that the labor market remains resilient.”

The share of consumers who report ‘jobs are hard to get’—an ETI component from the Consumer Confidence Survey®—rose for the first time in four months, from 14.9% in December to 16.8% in January, which is consistent with August levels. The share of small firms that report jobs are ‘not able to be filled right now’ was flat in January and has remained stable since September. Similarly, Job openings have held near a similar level since mid-2024, despite several large monthly swings. Measures of the economic activity in Real Manufacturing and Trade Sales and Industrial Production each contributed negatively to January’s Index, despite positive contributions over the second half of 2024.

Added Barnes, “While the labor market has cooled from its 2022 pace, metrics through January are broadly in line with the pre-pandemic labor market.” Initial claims for unemployment insurance of 216,800 in January was below the 2019 average following a decline of 10% after a recent peak in June 2024. In a stable January Employment Report, the share of involuntary part-time workers ticked up slightly after contributing positively to the ETI since September. Employment in the temporary-help industry declined in January, yet final revisions show the 5,000 workers gained since November is the strongest three-month stretch dating back to February 2022.

“Overall, January data reaffirms that the labor market remains stable,” Barnes concluded. “High employment levels, sustained real wage growth, and steady labor demand continue to support economic momentum.”

January’s decrease in the Employment Trends Index was driven by negative contributions from five of its eight components: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Ratio of Involuntarily Part-time to All Part-time Workers, Real Manufacturing and Trade Sales, the Number of Employees Hired by the Temporary-Help Industry, and Industrial Production.

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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