The Conference Board Employment Trends Index rose to 119.38 in June, up from 118.88 in May (downward revision), indicating that an increase in employment is likely in the coming months.
Despite the jump in June, the current index reading is below what it was in March and April this year. “Moreover, a range of other economic indicators beyond the Employment Trends Index point to an economy that is slowing,” said Frank Steemers, Senior Economist at The Conference Board. “Usually, it takes a few months for hiring decisions to adjust to changes in economic activity. Therefore, we expect positive, but decelerating, job growth over the next months.”
The index for June increased thanks to positive contributions from four of the eight labor market indicators, ordered from the greatest to the least contributor:
- Ratio of Involuntarily Part-time to All Part-time Workers
- Percentage of Respondents Who Say They Find “Jobs Hard to Get”
- Job Openings
- Number of Employees Hired by the Temporary-Help Industry
The current state of the labor market could shift by the end of the year and the beginning of the next, Steemers added, and a brief recession may be on the horizon. “In such a scenario, employers may reduce hiring — and possibly implement furloughs and layoffs, depending on the severity of a potential economic contraction. By early 2023, there could possibly be monthly job losses — and in that case, the unemployment rate would tick up.”
