Conference Board’s Employment Trends Index Edges Up in January
An index measuring employment trends in the U.S. ticked up in January, signaling a slight recovery of the labor market, data from the Conference Board showed Monday.
The Conference Board Employment Trends Index came in at 99.27 in January, up compared with a revised 98.55 for December.
January’s reading marks the ninth consecutive monthly increase for the index, the report said. However, the indicator is down 10% from a year ago.
The release of the index follows Friday’s employment report from the Bureau of Labor Statistics which showed U.S. labor market resumed hiring, albeit at a very slow pace, with nonfarm payrolls up by 49,000.
“The Employment Trends Index has been increasing in recent months, with the largest contributing component being the number of jobs in the temporary help industry,” said Gad Levanon, head of The Conference Board Labor Markets Institute.
Some uncertainty around job growth can be expected over the next few months, especially if some potentially adverse Covid-19 developments manifest such as the rapid spread of more aggressive virus strains, he said.
“On the upside, however, by spring we expect strong job growth to resume and continue throughout the remainder of the year,” Mr. Levanon said, adding that most of the job gains are expected in in-person services such as restaurants, hotels, recreation, passenger transportation, and childcare services.
“Between now and the end of the year, the unemployment rate could drop to about 5%,” he said.
The Employment Trends Index aggregates eight labor market-related indicators to show underlying trends in employment conditions. January’s improvement was driven by positive contributions from five of the eight components, which are the number of employees hired by the temporary-help industry, the ratio of involuntarily part-time to all part-time workers, industrial production, percentage of firms with positions not able to fill right now, and job openings.
Initial claims for unemployment insurance, the percentage of respondents who say they find jobs hard to get, and real manufacturing and trade sales components didn’t contribute positively to the index in January.
Source: Dow Jones