ETI Index Bounces Back, But Lower Employment Growth Expected

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The Conference Board Employment Trends Index (ETI) increased in April, after decreasing in March. The index now stands at 128.28, up from 126.42 in March. The change represents a 1.4 percent gain in the ETI compared to a year ago.

"Despite the April bounce back in the Employment Trends Index, its growth has slowed in recent months, suggesting that job growth will also slow," said Gad Levanon, Chief Economist, North America, at The Conference Board. "Employers have become more cautious as economic growth remains moderate and profits decline. Looking ahead, we anticipate job growth will remain below 200,000 a month."

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

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)**

Note: This month's Employment Trends Index incorporates annual revisions of Job Openings and Initial Claims for Unemployment Insurance.

*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.

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