July 2018 Conference Board Employment Index Improvement Continues

The Conference Board’s Employment Trends Index – which forecasts employment for the next 6 months improved with the author’s saying “We expect economic activity to remain strong in the coming months and the rapid expansion of employment should continue despite the very tight labor market“.

Analyst Opinion of Conference Board’s Employment Index

Econintersect evaluates the 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 accelerated 0.4 % month-over-month and 5.4 % year-over-year.

From the Conference Board:

The Conference Board Employment Trends Index™ (ETI) increased in July, after increasing in June. The index now stands at 109.89, up from 108.72 (a downward revision) in June. The change represents a 5.4 percent gain in the ETI compared to a year ago.

“The growth in the Employment Trends Index remains strong, supported by positive contributions from all of its components,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “We expect economic activity to remain strong in the coming months, and the rapid expansion of employment should continue despite the very tight labor market.”

July’s increase in the ETI was fueled by positive contributions from all eight components. From the largest positive contributor to the smallest, these were: the Ratio of Involuntarily Part-time to All Part-time Workers, Initial Claims for Unemployment Insurance, Number of Employees Hired by the Temporary-Help Industry, Industrial Production, Job Openings, Real Manufacturing and Trade Sales, The Percentage of Firms With Positions Not Able to Fill Right Now, and the Percentage of Respondents Who Say They Find “Jobs Hard to Get.”

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.