The Conference Board Employment Trends Index (ETI) climbed almost 2 points in July, signaling that employment is likely to grow. This follows two months of declines.
Selcuk Eren, Senior Economist at The Conference Board, commented: “The Index peaked in March 2022 and has been on a slow downward trend since then but remains elevated and notably above pre-pandemic levels. We expect positive employment growth for the coming months even if the rate slows down. With continued strength in the labor market and elevated wage growth, we anticipate the Federal Reserve will raise interest target rates one more time.”
Eren said that the workers are feeling optimistic, as evidenced by The Conference Board’s latest Consumer Confidence Survey. The percentage of consumers who said jobs are “hard to get” was in the single digits for the first time since March 2022. Initial unemployment claims remain low, while job openings are still above pre-pandemic levels.
However, Eren also noted that the number of temp workers has also been declining since March 2022. Temporary help services is an early indicator for hiring in other industries, so this decline may indicate “slower job gains and eventually job losses.” The Conference Board expects this will happen next year, when the effects of the Fed’s rate hikes will be felt in the job market, but that the impact will be short-lived. They expect unemployment to reach 4.2% by mid-2024, but then recover by the end of the year.