Labor Market’s Strong Momentum Continues Into January
The Conference Board reports that its Employment Trends Index continued December’s growth momentum into January. The index now stands at 106.93, up from 106.59 in December, and represents a 5.4 percent gain compared to one year ago.
“The Employment Trends Index continues its solid path upwards and shows no sign of slowing down,” says Gad Levanon, chief economist, North America, at The Conference Board. “A strong U.S. economy provides additional tailwinds to employment growth, bringing down the unemployment rate even further and encouraging more men and women to join the labor force.”
The Conference Board’s January report follows the U.S. Bureau of Labor Statistics report that the economy added 200,000 jobs in January, after a 160,000 job increase in December. Levanson says, “It seems like the acceleration in economic activity is spilling over to the labor market. Job growth is even strengthening a little, which is quite remarkable given how low the unemployment rate is. And there are no signs that the economy or the labor market are about to slow down. The unemployment rate has been stuck at 4.1 percent for the fourth month in a row, but there is very little doubt that with such solid job growth, it is headed downwards. This year, the unemployment rate is likely to reach its lowest rate since the 1960s.”
In calculating its Employment Trends Index, the Conference Board aggregates eight labor market indicators, which have been found to be accurate in their own areas. They are incorporated into the index to filter out noise and reveal trends more clearly. Of the eight indicators, five fueled January’s positive shift in the index. From the largest positive contributor to the smallest, these were: Percentage of Firms with Positions Not Able to Fill Right Now, Industrial Production, Initial Claims for Unemployment Insurance, Real Manufacturing and Trade Sales and Number of Employees Hired by the Temporary-Help Industry.
The other indicators aggregated into the index are Percentage of Respondents Who Say They Find “Jobs Hard to Get,” drawn from The Conference Board’s Consumer Confidence Survey; the Ratio of Involuntarily Part-time to All Part-time Workers and Job Openings, both from the Bureau of Labor Statistics.