Employment Trends Index Gains in November
Yesterday the Conference Board released its latest Employment Trends Index, and reported that the labor market index increased by 1.4 points in November and is now 9.3% above the level a year ago (see chart above). The Employment Trends Index is a composite of eight labor-market variables and is considered to be a leading indicator for trends in labor market conditions and total nonfarm employment. In November, 7 of the 8 components improved (Initial Claims for Unemployment Insurance, Percentage of Firms With Positions Not Able to Fill Right Now, Number of Temporary Employees, Part-Time Workers for Economic Reasons, Job Openings, Industrial Production and Real Manufacturing and Trade Sales), which helped drive the index to its highest level in two years.
Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board said:
“The disappointing employment numbers released last Friday are at odds with most of the leading indicators included in the Employment Trends Index. While we are not expecting economic activity or employment to grow rapidly anytime soon, we do expect employment to continue to moderately increase, following the trend of recent months.”
MP: The Employment Trends Index has had a pretty accurate track record of predicting past trends in payroll employment back to 1973. In that case, the ongoing gains in the index predict that we can look for gradual improvements in labor market conditions.