ETI Decreased Slightly; Lower Employment Growth Expected

Estimated reading time: 1 minute

The Conference Board Employment Trends Index (ETI) dipped down in February. The index now stands at 129.09, down from 129.15 in January (an upward revision). The change represents a 2.1 percent gain in the ETI compared to a year ago.

“The flatness of the Employment trends index since September suggests that the rapid job growth in recent months is likely to slow down,” said Gad Levanon, Managing Director of Macroeconomic and Labor Market Research at The Conference Board. “In particular, we are concerned about the temporary help industry component, one of the most powerful leading indicators of employment growth, which has declined for the second month in a row in February.”

February’s decrease in the ETI was driven by negative contributions from five of the eight components. In order from the largest negative contributor to the smallest, these were: the Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Percentage of Firms With Positions Not Able to Fill Right Now, Real Manufacturing and Trade Sales, Number of Employees Hired by the Temporary-Help Industry, and Industrial Production.

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

About The Conference Board

The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.