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Employment Trends Index falls in June, but decline likely the result of ‘noise’

July 08, 2019

The Conference Board’s Employment Trends Index fell in June, but the organization cautioned the decline is likely the result of “noise.” Job growth is expected to remain strong.

June’s decline was driven primarily by one component of the index — an increase in the percentage of respondents who say they find “jobs hard to get” in The Conference Board’s Consumer Confidence Survey.

“This marks the fourth largest monthly negative contribution in the series’ history, which is potentially the result of noise rather than a more significant signal,” said Gad Levanon, chief economist, North America, at The Conference Board.

“We therefore interpret this month’s large decline in the ETI with caution,” Levanon said. “With the US economy slowing a little, but still projected to remain above its 2% long-term trend, we expect job growth to remain strong enough to continue tightening the labor market and draw more people off the sidelines.”

The index level now stands at a reading of 109.51, down from the previous reading of 111.22 from data in May.

Eight components make up the Employment Trends Index:

  • Percentage of respondents who say they find “jobs hard to get” from The Conference Board Consumer Confidence Survey
  • Initial claims for unemployment insurance from the US Department of Labor
  • Percentage of firms with positions they not able to fill right now from the National Federation of Independent Business Research Foundation
  • Number of employees hired by the temporary-help industry from the US Bureau of Labor Statistics
  • Ratio of involuntarily part-time to all part-time workers from the BLS
  • Job openings from the BLS
  • Industrial production from the Federal Reserve Board
  • Real manufacturing and trade sales from the US Bureau of Economic Analysis

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