The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months improved with the author's saying "This supports our projections for strong economic growth in the coming year, suggesting that demand for labor is likely to remain strong".
Analyst Opinion of Conference Board's Employment Index
Econintersect evaluates the year-over-year change of this index (which is different than the headline view) - as we do with our own employment index. The year-over-year index growth rate accelerated 1.7 % month-over-month and 6.9 % year-over-year.
From the Conference Board:
The Conference Board Employment Trends Index™ (ETI) increased in August, after increasing in July. The index now stands at 110.88, up from 109.58 (a downward revision) in July. The change represents a 6.9 percent gain in the ETI compared to a year ago.
"The Employment Trends Index continues to accelerate, with this month's year-over-year increase being the strongest since May 2012," said Gad Levanon, Chief Economist, North America, at The Conference Board. "This supports our projections for strong economic growth in the coming year, suggesting that demand for labor is likely to remain strong. To meet this demand, employers must draw more people back into the labor force, especially in blue-collar occupations, where the labor market is increasingly tight."
August's increase in the ETI was fueled by positive contributions from all eight components. From the largest positive contributor to the smallest, these were: the 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, Real Manufacturing and Trade Sales, The Percentage of Firms With Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, Industrial Production, and Job Openings.
To add context to this index, the following graph compares BLS non-farm payrolls, the Econintersect Employment Index, and The Conference Board ETI. Econintersectuses non-labor and mostly non-monetary economic pulse points in constructing its index, while The Conference Board uses mostly elements of employment data.
(Click on image to enlarge)
The graph above offsets the Conference Board ETI by 5 months. Note that the Conference Board is currently projecting a slowing growth rate (and the Econintersect index is forecasting an improving rate of growth over the next six months - but growth slowing at six months out).
Caveats on the Employment Indices
According to the Conference Board:
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)
- Part-Time Workers for Economic Reasons (BLS)
- Job Openings (BLS)
- Industrial Production (Federal Reserve Board)
- Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)
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