Recent economic and labor market news suggests no rate cut in 2019
The Conference Board Employment Trends Index™ (ETI) increased marginally in April, following a decline in March. The index now stands at 110.79, up from 110.73 (a downward revision) in March. The increase marks a 2.3 percent gain in the ETI over the past 12 months.
“The Employment Trends Index increased slightly in April, but has been moving mostly sideways in recent months,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “In the past month, most economic indicators, including Friday’s job report, came out stronger than expected, essentially eliminating fears of a major slowdown in the US economy. Still, the behavior of the ETI in recent months suggests that employment will grow more slowly in the coming quarters than it did in the past year, which is to be expected in such a tight labor market. The labor market will continue to tighten, and in such an environment the Federal Reserve is unlikely to cut rates in 2019.”
April’s increase was fueled by positive contributions from five of the eight components. From the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” the Number of Employees Hired by the Temporary-Help Industry, Real Manufacturing and Trade Sales, Industrial Production, and Initial Claims for Unemployment Insurance.
The Employment Trends Index aggregates eight labor-market indicators, 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 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 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.
About The Conference Board
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Employment Trends Index (ETI)™ 2019 Publication Schedule (10 AM ET)