Employment Index Launched

US-based analyst The Conference Board has enhanced its product range by launching a new tracker, the Employment Trends Index (ETI), which aggregates eight separate labor-market indicators into a composite measure.

The launch will strengthen the labor economics and workforce management component of its existing suite of indexes, which includes the Leading Economic Index (LEI) and Coincident Economic Index (CEI), and the Consumer Confidence Index, as well as individual indicators like the CEO Confidence measure and Help-Wanted OnLine Data Series (HWOL).

The ETI has been plotted back to 1973, and the organisation say that on average it leads employment by 'six-to-nine months at peaks and by zero-to-three months at troughs'. The board points out that 'Employment, while a critical part of the overall economic picture, sometimes behaves very differently from the more general economic activity measured by the CEI or GDP' and suggests the new tool will help economists, investors and business executives involved in hiring and compensation planning.

The latest figures show a fall in May, continuing a decline that began in July 2007 and 'suggesting more softening to come in the labor market'. The index uses the 1996 figure as the base of 100, and currently stands at 113.7, down from 114.3 in April and down ten times that - 6% - since July 2007. The Board says total non-farm employment peaked in December 2007 and has declined each month since then, reaching a total loss of 324,000 jobs.

Gad Levanon, senior economist at The Conference Board, comments: 'We forecast further softening in the labor market, a moderate rise in unemployment, and weaker wage growth over the next several quarters. Employers will find it easier to recruit and hire, and will be looking at slower growth in compensation costs. Workers will find it harder to get a job, a raise or a bonus — all of which will further rein in consumer spending.' However, he adds, 'we don't anticipate job losses on the scale of those in that last contraction, in good part because employers have kept their payrolls leaner.'

The new Index will be published monthly, at 10 a.m. ET on the Monday that follows each Friday release of the Bureau of Labor Statistics situation report. Components of the ETI and their sources are as follows:

• 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 One or More Jobs Open (National Federation of Independent Business)
• 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)
• Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis).

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.