Employment Trends Confirm Payrolls Uptick

The Conference Board has released its Employment Trends Index (ETI), which showed a slight increase in January. Monday’s report probably acts like more of a confirmation rather than anything that would trump last week’s unemployment and payrolls report from the U.S. Department of Labor.

January’s index rose to 128.93, up from downwardly revised 128.71 in December. The change represents a 1.9% gain in the ETI compared to a year ago. All in all, this report is one in which the index increased but at a slower pace.

Investors do not look for the ETI to be a market-moving number. That being said, they do tend to look at this and other post-BLS reports for confirmation at a time that market and economic participants are looking for any additional insight they can find.

Each monthly report here aggregates eight labor-market indicators into a composite index that filters out “noise” to show underlying trends more clearly.

January’s increase in the ETI was driven by positive contributions from five of the eight components:

  • The percentage of respondents who say they find jobs “hard to get”
  • Industrial production
  • Real manufacturing and trade sales
  • Percentage of firms with positions they are unable to fill right now
  • The ratio of involuntarily part-time to all part-time workers

Monday’s report from the Conference Board said:

The Employment Trends Index rose for the second month in a row, reducing the likelihood of further slowing in employment growth. However, the temporary help industry component declined sharply in January, and because it is one of the best leading indicators of employment growth, we will monitor it closely in the coming months.

Again, this is a report that is generally viewed as one that would confirm or refute key changes, if they were way out of line. Fortunately, this is a confirming report.

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