U.S. Employment Points Toward Solid Job Growth Ahead
The Conference Board’s Employment Trends Index for May showed an increase, building on growth observed in April. The index grew in May to 133.7, up from 132.77 in April, and up 6.4 percent from where it was one year ago.
“While employment numbers have shown some softness in the past three months, there is no slowdown visible in the Employment Trends Index, suggesting solid job growth over the summer,” says Gad Levanon, chief economist, North America, at The Conference Board. “Employment will likely grow fast enough to continue tightening the labor market.”
In calculating its Employment Trends Index, The Conference Board aggregates eight labor-market indicators that it considers accurate in their own areas. Aggregating indicators into a composite index filters out “noise,” more clearly revealing trends within the data. The indicators come from the U.S. Department of Labor, the U.S. Bureau of Labor Statistics, the Federal Reserve Board and other sources.
The increase in the Employment Trends Index observed in May is attributed to positive performances by seven of the eight components. In order from the largest positive contributor to the smallest, these were: Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Ratio of Involuntarily Part-time to All Part-time Workers, Initial Claims for Unemployment Insurance, Industrial Production, Number of Employees Hired by the Temporary-Help Industry, Percentage of Firms with Positions Not Able to Fill Right Now, and Job Openings. Other indicators aggregated into the index include Real Manufacturing and Trade Sales, from the U.S. Bureau of Economic Analysis.