The Conference Board’s Employment Trends Index ended 2018 on a positive as it recovered in December from a minor decline the month before. The index rose to 111.61 from 110.23 in November. December’s increase represents a 5.4 percent increase over the past year. It also comes as the U.S. Bureau of Labor Statistics reports that the country’s economy added 312,000 jobs in the last month of the year.

“The Employment Trends Index rose sharply in December, reversing the declines in recent months, suggesting that employment will continue to expand in the coming months,” says Gad Levanon, chief economist, North America, at The Conference Board. “With gloom and doom views dominating the news in recent weeks, it is somewhat reassuring that leading indicators of employment are growing. While employment growth could slow down in 2019, it is still likely to expand fast enough to further tighten the labor market.”

There were no signs of a slowdown in job growth in the December jobs report from the U.S. government, Levanon notes, and wages continue to accelerate, with average hourly earnings growing at an annual rate of 3.2 percent in the past 12 months and 3.7 percent in the past six months. He says, “All the main measures of wages are now rapidly accelerating, suggesting that more people from the sidelines will return to the labor force in 2019. The improving labor force participation rate in December led to an increase in the unemployment rate to 3.9 percent. The expansion in labor supply is allowing employers to more easily expand their workforce and meet demand for their goods and services.”

Levanon adds, “While we do expect some slowdown in the U.S. economy and labor market, this jobs report should boost confidence in the U.S. economy. Together with strong wage growth, it suggests that markets are probably underestimating the number of times the Federal Reserve will increase interest rates in 2019. We expect two rate hikes during 2019.”

In determining its Employment Trends Index, the Conference Board aggregates eight labor market indicators that it has found are accurate within their own areas. It notes that aggregated individual indicators are placed into a composite index to filter out “noise” and show underlying trends more clearly. The increase in December was fueled by positive contributions from seven of the eight components. From the largest positive contributor to the smallest, these were: the Percentage of Firms With Positions Not Able to Fill Right Now, Percentage of Respondents Who Say They Find “Jobs Hard to Get”, the 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, and Real Manufacturing and Trade Sales.

An indicator tracked by The Conference Board but not providing a positive contribution in December’s aggregate figure was the Bureau of Labor Statistics’ Job Openings data.