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posted on 05 February 2018

January 2018 Conference Board Employment Index Growth Rate Improves

Written by Steven Hansen

The Conference Board's Employment Trends Index - which forecasts employment for the next 6 months improved with the author's saying "The Employment Trends Index continues its solid path upwards and shows no sign of slowing down".

Analyst Opinion of Conference Board's Employment Index

Econintersect evaluates year-over-year change of this index (which is different than the headline view) - as we do with our own employment index. The year-over-year index growth rate improved from last month.

The following note was issued with this month's data relearse by the Conference Board:

This month's Employment Trends Index reflects historical revisions of Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics).

Note that the relationship to jobs growth changed by this reindexing - compare the following graph to the current month's graph:

Note that the Econintersect Employment Index is not based on employment data.

From the Conference Board:

The Conference Board Employment Trends Index™ (ETI) increased in January, after increasing in December. The index now stands at 106.93, up from 106.59 (a downward revision) in December. The change represents a 5.4 percent gain in the ETI compared to a year ago. "The Employment Trends Index continues its solid path upwards and shows no sign of slowing down," said Gad Levanon, Chief Economist, North America, at The Conference Board. "A strong US economy provides additional tailwinds to employment growth, bringing down the unemployment rate even further and encouraging more men and women to join the labor force." January's increase in the ETI was fueled by positive contributions from five out of the eight components. From the largest positive contributor to the smallest, these were: Percentage of Firms with Positions Not Able to Fill Right Now, Industrial Production, Initial Claims for Unemployment Insurance, Real Manufacturing and Trade Sales, and Number of Employees Hired by the Temporary-Help Industry.

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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.

The graph above offsets the Conference Board ETI by 5 months. Note that the Conference Board is currently projecting an relatively stable growth rate (and the Econintersect index is showing an improving rate of growth over the next six months.

Caveats on the Employment Indices

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)


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