The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months declined with the author's saying "In the coming months, we expect job growth to remain solid".
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 by 0.8 % month-over-month and grew 1.3 % year-over-year. The Econintersect employment index declined. Remember, both of these indices are predicting growth 6 months from now.
From the Conference Board:
The Conference Board Employment Trends Index™ (ETI) increased in July, following a decline in June. The index now stands at 110.98, up from 109.30 (a downward revision) in June. The increase marks a 1.3 percent gain in the ETI over the past 12 months.
"The Employment Trends Index increased in July but continues to hover around a flat trend since the summer of 2018," said Gad Levanon, Head of The Conference Board's Labor Market Institute. "In the second half of 2018, the Employment Trends Index started signaling a slowdown in job growth. So far this year, job growth has indeed slowed down compared to 2018, which is not surprising given the modest economic slowdown and the recruiting difficulties associated with a tight labor market. In the coming months, we expect job growth to remain solid, which will be enough to further tighten the labor market. Growing labor force participation rates will somewhat ease these hiring pressures."
July's increase was fueled by positive contributions from seven of the eight components. From the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find "Jobs Hard to Get," Ratio of Involuntarily Part-time to All Part-time Workers, Initial Claims for Unemployment Insurance, Percentage of Firms With Positions Not Able to Fill Right Now, Real Manufacturing and Trade Sales, Industrial Production, and Number of Employees Hired by the Temporary-Help Industry.
(Click on image to enlarge)
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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