Labor Shortages

Index Signals Job Growth Likely to Continue but at a Slower Rate in the Coming Months

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The Conference Board Employment Trends Index™ (ETI) decreased in October to 114.16, from a downwardly revised 114.63 in September. The Employment Trends Index is a leading composite index for 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 slightly in October and has been on a declining trend since it reached its peak in March 2022," said Selcuk Eren, Senior Economist at The Conference Board. “While changes have been minimal month to month and the index remains elevated, there are signs of cooling as recent job gains have been mostly concentrated in industries facing major labor shortages including in-person services and government. If labor markets continue cooling and wage growth slows further, the Federal Reserve may be done with interest rate hikes for the current tightening cycle.”

Eren added: “In industries where employment has yet to fully recover from the pandemic, such as leisure and hospitality and government, we will continue seeing job growth. Job growth will also stay positive in health care and social assistance due to labor shortages and the aging US population. Elsewhere, we see declines in labor demand, especially in industries that boomed during the start of the pandemic. Information services, finance and insurance, and transportation and warehousing continued shedding jobs in October and employment in the manufacturing industry has been stagnant over the last year. These developments are observed in several components of the ETI with declines in job openings, a higher share of involuntary part time workers, and a small uptick in initial claims for unemployment. We continue to project a short-lived recession in 2024 as real GDP growth turns negative, but with minimal impact on the unemployment rate which is expected to rise to 4.2 percent by mid-2024.”

October’s decrease in the Employment Trends Index was driven by negative contributions from six of eight components: Ratio of Involuntarily Part-time to All Part-time Workers, Real Manufacturing and Trade Sales, Industrial Production, Job Openings, Initial Claims for Unemployment Insurance, and Percentage of Firms with Positions Not Able to Fill Right Now.

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.

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.

The Conference Board Employment Trends Index™ and turning points, November 1973 to Present