The Conference Board Employment Trends Index™ (ETI) Increased in December

Index Signals Job Growth to Continue in Early 2024

NEW YORK, Jan. 8, 2024 /PRNewswire/ -- The Conference Board Employment Trends Index™ (ETI) increased in December to 113.15, up from a downwardly revised 112.48 in November. 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 went up slightly in December, signaling employment will continue to grow in early 2024," said Selcuk Eren, Senior Economist at The Conference Board. "The index has been on a gradual decline since its peak in March 2022, yet it remains notably above pre-pandemic levels. This suggests continued job additions in early 2024, albeit at a decelerated pace. We project a short and shallow recession starting in H1 2024 and negative payroll prints in the second part of the year."

Eren added: "For now, the labor market continues to add jobs. Most CEOs said they are either expecting to continue hiring or keep their existing workforce whereas only 13% expect to cut workers within the next 12 months according to The Conference Board Measure of CEO Confidence™ for the US.

"However, over the past six months, payroll gains have been predominantly driven by healthcare and social assistance, leisure and hospitality, and government. It is unlikely that gains in these sectors alone can keep payroll positive going forward. Employment in other industries was either flat or declined slightly. Employment in temporary help services—an early indicator for hiring in other industries and part of the ETI—has been declining since November 2022. Other indicators including job openings, hirings, and voluntary quits all point to a softening labor market. Our latest US forecast sees the unemployment rate rising to 4.3% by the end of 2024, corresponding with about 600,000 job losses. However, we expect the recession to be short-lived and jobs to quickly recover by the end of 2024."

December's increase in the Employment Trends Index was driven by positive contributions from four of its eight components: Percentage of Respondents Who Say They Find "Jobs Hard to Get", Initial Claims for Unemployment Insurance, Real Manufacturing and Job Openings.

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 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.

NOTE: This month's release incorporates annual revisions of standardization factors to the Employment Trends Index, which bring it up-to-date with revisions in the source data. These revisions do not change the cyclical properties of the index. The standardization factors, known as volatility adjustment factors, are done by calculating the standard deviation of the monthly percent change in each component. The updated period used for calculating the standardization factors is November 1973 to December 2022. The standardization factors are then used to construct the index from November 1973 to present. As a result, the revised index, in levels and month-on-month changes, will not be directly comparable to those issued prior to this annual revision. For more information, please visit our website at http://www.conference-board.org/data/eti.cfm

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org.

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SOURCE The Conference Board