Employment Trends Index™ (ETI) Decreased in April

Index Signals Job Growth Will Stall in the Second Half of 2024

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The Conference Board Employment Trends Index™ (ETI) decreased in April to 111.25, from a downwardly revised 112.16 in March. The Employment Trends Index is a leading composite index for employment. When the Index increases, employment is likely to grow as well, and vice versa. Turning points in the Index indicate that a change in the trend of job gains or losses is about to occur in the coming months.

“The ETI fell in April, a sign that employment growth could stall in the second half of 2024,” said Will Baltrus, Associate Economist at The Conference Board. “The ETI has been on a downward trajectory since its peak in March 2022, and this month signals a continuation of that trend. However, the Index remains historically elevated and is still above its prepandemic level, which suggests aggregate job losses are less likely than a slowdown in employment growth.”

Baltrus added: “April payrolls data showed an increase in employment (+175,000) for the 39^th consecutive month. However, between the decrease in the topline number and the narrowing of job gains across sectors relative to recent months, the labor market is beginning to show signs of cooling following a period of very strong growth since the pandemic recession. Nonetheless, it is unlikely that substantial job losses will occur over the coming months, as employers are still facing labor shortages. In April, the Percentage of Firms with Jobs Not Able to Fill Right Now—a component of the ETI—ticked up to 40% and remains elevated compared to prepandemic levels.

“Despite labor shortages for some firms, many other firms are not looking to hire, but are also not letting workers go, which is known as ‘labor hoarding’. Shortages and hoarding are keeping the unemployment rate low and wages sticky. Sticky wages along with elevated interest rates are raising the cost of doing business for many companies. These factors may play into employer decisions to hire more workers, but we posit that slowing consumer demand for goods and services ahead will be the primary driver of slower growth and an uptick in the unemployment rate ahead. Consumers may be becoming concerned about these dynamics as the number of consumers who said jobs were hard to get in our Consumer Confidence Survey®—another ETI component — increased.”

April’s decrease in the Employment Trends Index was driven by negative contributions from three of its eight components: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Ratio of Involuntarily Part-time to All Part-time Workers, and Number of Employees Hired by the Temporary-Help Industry.

The Employment Trends Index aggregates eight leading indicators of employment, 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 Conference Board Employment Trends Index ™, January 2000 to Present

The eight leading indicators of employment 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)**

*Statistical imputation for the recent month

**Statistical imputation for two most recent months

The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET, on the Monday that follows each Friday release of the Bureau of Labor Statistics Employment Situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.

About The Conference Board

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The Conference Board Employment Trends Index™ and turning points, November 1973 to Present