Employment Index Improves In June, Faces Uncertain Future
The Conference Board reports that its Employment Trends Index (ETI) ticked up in June, stabilizing after sharp declines over the past several months. The June Index figure of 49.05 is up from 45.27 in May, but still down from 54.8 percent a year ago. The Conference Board’s ETI report follows data from the U.S. Bureau of Labor Statistics showing employment increasing by 4.8 million last month, mostly from the retail, leisure and hospitality sectors.
“The Employment Trends Index increased for the second consecutive month, but the virus’s recent proliferation threatens those gains and puts the U.S. labor market’s future in an even more precarious position,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “In response to this resurgence, many governments have delayed or reversed their re-opening plans, which could lead to lower hiring. Given the possibility of less recruiting and the fact that layoff rates remain high, the upward trend in the number of jobs may not continue. The unemployment rate may plateau or even increase in the coming months.”
June’s job gains dropped the unemployment rate to 11.1 percent, although The Conference Board notes that the true rate, after adjusting for a misclassification error, is 12.3 percent. And the number of jobs in the U.S. is still almost 15 million below the February level. Adding to the future uncertainty, layoff rates remain historically high, with 1.4 million Americans filing new applications in the last full week of June.
The Employment Trends Index aggregates eight labor market indicators, 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. June’s increase was fueled by positive contributions from all eight components.