Labor Shortages

Pace of Job Growth Likely to Slow in the Months Ahead

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The Conference Board Employment Trends Index™ (ETI) decreased in May to 116.15, down from an upwardly revised 116.79 in April 2023. 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 declined slightly in May and has been on a slowly declining trend since reaching its peak in March 2022," said Selcuk Eren, Senior Economist at The Conference Board. “The Index remains quite elevated, so job gains are likely to continue over the next few months, but at a slower rate. The brunt of job losses is concentrated within a few sectors, while the economy at large continues to generate employment opportunities in industries grappling with labor shortages. Wage growth is slowing down but remains above its pre-pandemic rate. We expect the Federal Reserve will raise interest rates at least one more time by 25 basis points, to slow wage growth and reduce inflationary pressures. This will likely lead to job losses and a rise in unemployment levels later in 2023 through the early months of 2024.”

Eren added: “Overall, we remain in a very tight labor market, especially compared to pre-pandemic conditions. Job growth continues economy-wide, with in-person service sectors leading the way. Industries that have yet to fully recover from the pandemic—including leisure and hospitality, along with the government sector—are poised to continue adding jobs, while an aging US population will fuel sustained employment growth in the healthcare and social assistance industry. For now, the labor market is cooling only in select industries—most notably the information sector, which includes most tech companies. However, weakness is starting to become visible across other labor indicators, including a decline in voluntary quits and a surge in layoff announcements over the first five months of 2023.”

May’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”, Real Manufacturing and Trade Sales, Percentage of Firms with Positions Not Able to Fill Right Now, Job Openings, 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.

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