The Conference Board Employment Trends Index (ETI) Improved in October
Tuesday, November 9th, 2021
The Conference Board Employment Trends Index™ (ETI) rose sharply in October. The index now stands at 112.23, up from 109.68 in September.
"The increase in the Employment Trends Index suggests strong employment growth is in store over the next several months," said Gad Levanon, Head of The Conference Board Labor Markets Institute. "As the negative economic impact of the Delta variant subsides, spending on—and employment in—in-person services should continue to recover toward pre-pandemic levels. We project the unemployment rate is likely to dip below four percent within the next six months and may reach the pre-pandemic low of 3.5 percent by the end of 2022. In other words, labor shortages may not go away. In such an environment, significant upward pressure on wages may become the new normal."
October's increase in the Employment Trends Index was driven by positive contributions from six of its eight components: Initial Claims for Unemployment Insurance; Percentage of Respondents Who Say They Find "Jobs Hard to Get"; Number of Temporary Employees; Real Manufacturing and Trade Sales; Industrial Production; and Ratio of Involuntarily Part-time to All Part-time Workers. The two exceptions were Job Openings and Percentage of Firms With Positions Not Able to Fill Right Now.
The Employment Trends Index is a leading composite index for employment. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months. The Employment Trends Index aggregates eight leading indicators of employment, 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.
The eight leading indicators of employment aggregated into the Employment Trends Index include:
Percentage of Respondents Who Say They Find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey®)
Initial Claims for Unemployment Insurance (U.S. Department of Labor)
Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
Job Openings (BLS)**
Industrial Production (Federal Reserve Board)*
Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**
*Statistical imputation for the recent month
**Statistical imputation for two most recent months
The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET, on the Monday that follows each Friday release of the Bureau of Labor Statistics Employment Situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.