The Conference Board Employment Trends Index™ (ETI) decreased in June to 114.31, from a downwardly revised 115.53 in May. 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 fell for the second consecutive month in June, signaling slower job growth in the coming months,” said Selcuk Eren, Senior Economist at The Conference Board. “While the Index has been on a declining trend since March 2022, it remains quite elevated in a historical context. This suggests the US will continue adding jobs, just at a slower rate. We will need to see further declines in the ETI before predicting if—and when—employment growth will turn negative.”
Eren added: “We’re still in a very tight job market, especially compared to pre-pandemic conditions. While signs of cooling have emerged, they’re proceeding at a very slow pace. Among the components of the ETI, job openings have been trending downwards since the highs reached a year ago, but remain well above pre-pandemic levels. The number of employees working in temporary help services has been falling since November 2022. As an important early indicator for hiring, this previews slower job gains and eventually job losses in other industries. Looking ahead, we expect the Fed’s rate hikes to have a more visible negative impact on job growth by the end of 2023 and into the first half of 2024. By the middle of next year, we forecast the unemployment rate to peak at around 4.5 percent and labor force participation to fall to 62.1 percent—compared to current levels of 3.6 percent and 62.6 percent, respectively.”
June’s decrease in the Employment Trends Index was driven by negative contributions from five of its eight components: Ratio of Involuntarily Part-time to All Part-time Workers, Initial…
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