The Conference Board’s Employment Trends Index (ETI) increased in September to 120.17, versus a downward revision of 118.48 in August 2022.
“The ETI increased in September 2022, indicating that employment will continue to grow in the coming months,” said Frank Steemers, senior economist at The Conference Board.
“However, job creation is likely to slow from its recent pace as the US economy has weakened as the Federal Reserve rapidly raises interest rates. Additionally, most industries have recovered their pandemic-induced job losses, which is further slowing the pace of hiring.”
The Employment Trends Index is a leading composite index for employment, when the index rises, employment is likely to rise as well, and vice versa. The turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months.
Some decrease in labor shortages expected as demand for workers declines. However, the hiring and retention difficulties will not go away, as the unemployment rate is only projected to rise to around 4.5 percent in 2023 and labor supply remains challenging.
In this environment, wage growth may also remain high. Companies will need to prepare for continued labor shortages and further improve their sourcing and retention strategies to remain competitive.
The September increase in the Employment Trends Index was driven by positive contributions from 7 of 8 components. From largest to smallest positive contributor, these were: Ratio of involuntary part-time workers to all part-time workers, initial unemployment insurance claims, job openings, actual manufacturing and trade sales, number of employees hired by the temporary help industry, percentage of respondents who say they find “hard-to-get jobs”, and industrial production.
The Employment Trends Index aggregates 8 leading employment indicators, each of which has proven to be accurate in its own area. The aggregation of individual indicators in a composite index filters out “noise” to show underlying trends more clearly.
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