ETI Increased Sharply in February; Solid Job Growth Expected in the Coming Months

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The Conference Board Employment Trends Index (ETI) increased in February, after decreasing slightly in January. The index now stands at 131.39, up from 129.91 (a downward revision) in January. The change represents a 3.1% gain in the ETI compared to a year ago. 

“The Employment Trends Index increased sharply in February, with positive contributions from each of its eight components, providing more evidence that job growth is accelerating,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “It seems that higher business confidence is carrying over to hiring. As a result, in 2017 labor supply constraints will be strongly felt across many industries and locations.” 

February’s increase in the ETI was fueled by positive contributions from all eight components. In order from the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Initial Claims for Unemployment Insurance, Percentage of Firms With Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, Job Openings, Industrial Production, Real Manufacturing and Trade Sales, and the Ratio of Involuntarily Part-time to All Part-time Workers. 

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

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