The Conference Board Employment Trends Index increased slightly in November, which may be an indicator that last week’s disappointing jobs announcement may be an outlier. The Conference Board projected the possibilities of growth ahead as well as a 70-year low in unemployment.
November’s Employment Trends Index rose to a reading of 114.49 from October’s reading of 113.03.
“The Employment Trends Index continues to advance steadily, suggesting a decent outlook for job growth over the next several months,” said Gad Levanon, head of The Conference Board Labor Markets Institute. “In that context, November’s disappointing payrolls growth may be an outlier rather than a new trend. Of course, this is contingent on the emerging Omicron variant — a new wildcard that threatens to extend Covid-19’s impacts on job growth beyond Delta.”
Much of the job growth should come in sectors that are reopening, such as restaurants, hotels, entertainment, personal services and passenger transportation, Levanon said.
“These industries are relatively labor-intensive, so their further recoveries will be key for sustaining strong job growth,” he said. “At the same time, labor supply will struggle to meet the demand for workers, as the US working-age population stagnates and baby boomers drop out of the workforce.”
As a result, The Conference Board projects the US unemployment rate could reach a 70-year low of 3.0% by the end of next year.
“Indeed, even if pandemic disruptions to labor supply fully subside in the year ahead, a tight labor market is likely here for the foreseeable future,” Levanon said. “Employers should expect recruiting difficulties and quit rates to remain high, fueling the upward pressure on wages.”
Separately, the National Association for Business Economics today released a report that projects full employment in the US should be reached within a year.
“Nearly six out of 10 panelists anticipate the US economy will reach full employment within a year,” said Survey Chair Yelena Shulyatyeva, who is also senior US economist, Bloomberg. “Two-thirds of the panel expect wage increases will keep inflation elevated over the next three years.”