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posted on 04 April 2016

March 2016 Conference Board Employment Index Again Declined.

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months declined suggesting "with GDP barely growing at a two percent rate, it's difficult to see how employment can continue to expand by 200,000 or more jobs per month." Consider that this projected growth is six months from now.

Econintersect is forecasting a lower jobs growth rate six months from now. Note that the Econintersect Employment Index is not based on employment data.

From the Conference Board:

The Conference Board Employment Trends Index™ (ETI) declined in March, after decreasing slightly in February. The index now stands at 127.48, down from 128.54 in February. The change represents a 1.1 percent gain in the ETI compared to a year ago.

"The Employment Trends Index has been showing signs of weakening in recent months, suggesting that employment growth is likely to slow through the summer," said Gad Levanon, Chief Economist, North America, at The Conference Board. "With GDP barely growing at a two percent rate, it's difficult to see how employment can continue to expand by 200,000 or more jobs per month."

March's decrease in the ETI was driven by negative contributions from four of the eight components. In order from the largest negative contributor to the smallest, these were: the Percentage of Respondents Who Say They Find "Jobs Hard to Get," Percentage of Firms With Positions Not Able to Fill Right Now, Ratio of Involuntarily Part-time to All Part-time Workers, and Initial Claims for Unemployment Insurance.


To add context to this index, the following graph compares BLS non-farm payrolls, the Econintersect Employment Index, and The Conference Board ETI. Econintersect uses non-labor and mostly non-monetary economic pulse points in constructing its index, while The Conference Board uses mostly elements of employment data.

Comparing BLS Non-Farm Employment YoY Improvement (blue line, left axis) with Econintersect Employment Index YoY Improvement (red line, left axis) and The Conference Board ETI YoY Improvement (yellow line, right axis)


The graph above offsets the Conference Board ETI by 5 months. Note that the Conference Board is currently projecting a declining growth rate and the Econintersect index is showing a marginally declining rate of growth.

Caveats on the Employment Trends Index

According to the Conference Board:

The Employment Trends Index aggregates eight labor-market indicators, 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 labor-market indicators 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)
  • Part-Time Workers for Economic Reasons (BLS)
  • Job Openings (BLS)
  • Industrial Production (Federal Reserve Board)
  • Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)

Unfortunately many of these indices are not accurate in real time being subject to at times significant backward revision.

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