Employment Recovery Continues In August
The upward momentum of U.S. job growth continued in August. The Conference Board’s Employment Trends Index (ETI) ticked upward last month, following earlier increases in May, June and July. The index now stands at 52.55, up from 51.37 in July. However, the index remains well down from its year-ago level of 109.8.
“Despite the rise in new COVID-19 cases at the beginning of the summer, job growth continues to gain momentum: the Employment Trends Index increased for the fourth-consecutive month,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “Over the coming months, job growth will persist as industries impacted by social distancing such as travel, hotels, restaurants and personal care will continue to recover. However, another wave of infections this fall would limit the expansion of the U.S. labor market.”
Last week, the U.S. Bureau of Labor Statistics reported that employment increased by 1.37 million in August, with 238,000 coming from the hiring of temporary 2020 Census workers, and dropping the unemployment rate to 8.4 percent. Between February and April, more than 22 million jobs were lost, and 48 percent of them have been recovered since April.
Levanon says, “The report suggests that the rise in new COVID-19 cases at the beginning of the summer did not prevent the economy from further expanding. Most measures of economic activity in July and early August came in better than expected. Even though the employment gains from the reopening of the economy are slowing down, they remain well above the additional layoffs, which are shrinking as well. We expect employment growth to slow down further in the coming months as government stimulus tapers off, and as concerns about another wave of infections in the fall make consumers and businesses more cautious.”
The Conference Board’s ETI 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. August’s increase was fueled by positive contributions from six of the eight components.
According to a question on hiring posted on PPAI’s PromoPoll in July, 20 percent of industry respondents said they do plan to hire new employees this year, 38 percent said maybe, 38 percent said definitely not and four percent were unsure.