Employment Trends Index Moving Sideways in 1H of 2016

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The Conference Board Employment Trends Index (ETI) increased in June, after declining in May. The index now stands at 128.13, up from 126.42 (a downward revision) in May. The change represents a 1.8% gain in the ETI compared to a year ago.

“The Employment Trends Index has been moving sideways in the first half of 2016, suggesting only moderate job growth in the coming months,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “In such an uncertain political and economic environment, U.S. businesses, which in total have been experiencing shrinking profits for over a year, are unlikely to rapidly expand their payrolls.”

June’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: Ratio of Involuntarily Part-time to All Part-time Workers, Initial Claims for Unemployment Insurance, 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, Industrial Production, and Job Openings.

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.

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