The Conference Board Employment Trends Index rose in May to a reading of 111.44, up from April’s downwardly revised reading of 110.48. The index remains above prepandemic levels.
“The Employment Trends Index rose in May, another small oscillation that we have continued to observe since the index started the downward trajectory it’s been on since a peak in March 2022,” Will Baltrus, associate economist at The Conference Board, said in a press statement.
“May’s uptick signals employment could increase in the second half of 2024, but the Employment Trends Index’s longer-term downward trajectory signals the high level of monthly increases in employment observed post-pandemic could slow down. That said, the index remains far above its prepandemic level, which suggests aggregate job losses are less likely than a deceleration in hiring.”
Baltrus noted that May’s payroll data also showed a slight uptick in the unemployment rate to 4.0%, in line with the Conference Board’s forecast, as initial claims for unemployment insurance, a component of the Employment Trends Index, rose in May to 222,300 from a weekly average of 210,300 in April.
“Despite this slight uptick, the labor market still exhibits signs of tightness,” Baltrus said.
In addition, the share of firms reporting “jobs are hard to fill,” another component of the Employment Trends Index, rose to 42% in May, indicating employers are struggling to find suitable applicants for positions. The existing labor market tightness is expected to be exacerbated by retirees outpacing new labor force entrants, suggesting job cuts may not occur any time soon, according to The Conference Board.
May’s increase in the Employment Trends Index was driven by positive contributions from six of its eight components: percentage of respondents who say they find jobs “hard to get,” job openings, percentage of firms with positions not able to fill right now, ratio of involuntarily part-time to all part-time workers, industrial production and real manufacturing and trade sales.