October 2018 Conference Board Employment Index Improved But Rate Of Growth Slowed

The Conference Board’s Employment Trends Index – which forecasts employment for the next 6 months improved with the author’s saying “After last month’s decline, The Employment Trends Index bounced back and is signaling solid employment growth through the winter“.

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 decelerated 1.7 % month-over-month and 4.6 % year-over-year.

From the Conference Board:

The Conference Board Employment Trends Index™ (ETI) increased in October, following a decrease in September. The index now stands at 110.72, up from 110.39 (a downward revision) in September. The change represents a 4.6 percent gain in the ETI compared to a year ago.

“After last month’s decline, The Employment Trends Index bounced back and is signaling solid employment growth through the winter,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “The main determinants of wage growth – economic growth, a tight labor market, faster inflation and labor productivity growth – are all aligning to accelerate wage growth. Higher labor costs are putting pressure on corporate profits and provide additional incentive for businesses to cut costs through efficiency gains and automation, as well as pass the higher costs on to consumers, fueling inflation. At the same time, higher interest rates will slow down the US economy in 2019. On the positive side, better labor market conditions are likely to continue to draw more workers from the sidelines and raise job satisfaction for existing workers.”

October’s increase in the ETI was fueled by positive contributions from five of the eight components. From the largest positive contributor to the smallest, these were: the Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Industrial Production, Real Manufacturing and Trade Sales, the Ratio of Involuntarily Part-time to All Part-time Workers, and the Number of Employees Hired by the Temporary-Help Industry.