The Conference Board Employment Trends Index Increased in December
Tuesday, January 8th, 2019
The Conference Board Employment Trends Index increased in December, following a minor decline in November. The index now stands at 111.61, up from 110.23 in November. The increase marks a 5.4 percent gain in the ETI over the past 12 months.
"The Employment Trends Index rose sharply in December, reversing the declines in recent months, suggesting that employment will continue to expand in the coming months," said Gad Levanon, Chief Economist, North America, at The Conference Board. "With gloom and doom views dominating the news in recent weeks, it is somewhat reassuring that leading indicators of employment are growing. While employment growth could slow down in 2019, it is still likely to expand fast enough to further tighten the labor market. All the main measures of wages are now rapidly accelerating, suggesting that more people from the sidelines will return to the labor force in 2019. The improving labor force participation rate in December led to an increase in the unemployment rate to 3.9 percent. The expansion in labor supply is allowing employers to more easily expand their workforce and meet demand for their goods and services."
December's increase was fueled by positive contributions from seven of the eight components. 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," the Ratio of Involuntarily Part-time to All Part-time Workers, Initial Claims for Unemployment Insurance, Industrial Production, Number of Employees Hired by the Temporary-Help Industry, and Real Manufacturing and Trade Sales.
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)