Conference Board Employment Trends Index, September; 2021

NEW YORK, October 11, 2021…The Conference Board Employment Trends Index™ (ETI) fell marginally in September, the first decrease in seven months. The index now stands at 110.35, down from 110.68 (an upward revision) in June.

“The Employment Trends Index has flattened since July, suggesting it may be a few months before the pace of job growth regains the momentum of earlier this year,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “The chief culprit behind lagging job growth has been the summer surge in COVID-19 infections associated with the Delta variant. Spending on—and hiring in—in-person services significantly slowed in recent months. With new cases now trending downward, the risk of infection seems poised to decline over the rest of the year but remain significant. Thus, we expect more risk-averse consumers to continue to spend less on in-person services than they did pre-pandemic.”

Despite expectations that labor supply would begin to increase as pandemic-related unemployment assistance expired and schools reopened, recruiting difficulties remained historically high in September, and perhaps even worsened. New vaccine mandates for employment is causing terminations and reduces the labor supply for large employers, government contractors, and the healthcare sector. “It is becoming more likely that severe labor shortages will continue impacting the US economy in the months ahead,” said Levanon. “In such a scenario, wages will continue to rise rapidly—contributing to faster inflation—and economic growth will gradually become more encumbered by labor supply constraints.”

September’s decrease in the Employment Trends Index was driven by negative contributions from two of eight components: Percentage of Respondents Who Say They Find “Jobs Hard to Get” and Number of Temporary Employees. The other six components, from the largest positive contributor to the smallest, were: Initial Claims for Unemployment Insurance; Industrial Production; Job Openings; Real Manufacturing and Trade Sales; Percentage of Firms With Positions Not Able to Fill Right Now; and Ratio of Involuntarily Part-time to All Part-time Workers.

The Employment Trends Index is a leading composite index for employment. Turning points in the Index indicate that a turning point in the number of jobs added is about to occur in the coming months. The Employment Trends Index aggregates eight leading indicators of employment, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

Conference Board commentary on September; 2021 jobs report

Lackluster Job Growth amid Delta and Labor Shortages

Commentary on September BLS Jobs Report by Frank Steemers, Senior Economist, The Conference Board

Today’ jobs report showed the second consecutive month of lackluster job growth, reflecting Delta’s impact on the economy and a US labor market that remains tight.

Nonfarm payroll employment increased by 194,000 in September, after an upwardly revised increase of 366,000 in August. The published unemployment rate ticked down from 5.2 to 4.8 percent, and the true rate, after adjusting for the misclassification error, declined from 5.5 to 4.9 percent. Overall, jobs still number 5 million below February 2020 levels, with women representing 57.5 percent of these employment losses. The labor force participation rate ticked down from 61.7 to 61.6 percent in September.

Only 74,000 jobs were added in the leisure and hospitality industry, with food services and drinking places adding just 29,000 jobs. This weakness shows how the pandemic continues to hamper job growth, especially in the in-person services industries. Jobs were gained in retail trade, construction, and professional and business services. On the other hand, even though schools are reopening, private and government education declined by 179,700 jobs, possibly showing that some schools are not returning to prepandemic employment levels and vaccine mandates are constraining the return of some workers.

While overall job growth was weak for the second consecutive month, peak disruption may be behind us with the number of COVID-19 cases nationally slowly declining. Today’s job numbers were collected in the first half of September when Delta cases were at their peak. If infections continue to decline over the coming months, job growth may pick up again, primarily in the in-person services industries.

The labor market remains tight and labor shortages are perhaps getting even more severe. Average hourly earnings increased 6.0 percent (annual rate) over the past six months and other labor market indicators also show that employers are having difficulties attracting and retaining workers, especially in blue-collar and manual services jobs such as construction, production, transportation, personal care, and food services. This tight labor market with rising wages will feed into price inflation pressures.

Hiring and retention difficulties could persist over the next several months. Some people continue to be fearful of catching the virus and are delaying a return to the labor market. In addition, the federal vaccine mandate for large private employers may be a new barrier to both recruitment and retention as some workers will not be willing to take the vaccine or get regularly tested. On the other hand, the expiration of elevated federal unemployment benefits and school reopenings may lead to more people and working parents returning to the labor market.

As more people get vaccinated, job growth fluctuations should diminish. In addition, more people will become available to work and this should gradually lessen the pandemic-induced labor shortages. However, until now this does not appear to be the case. Employers may experience some relief in hiring difficulties during 2022 but not for long. By the end of 2022 or early 2023, the unemployment rate may have dropped below the prepandemic low of 3.5 percent, leading to a resurgence of regular labor shortages.

Conference Board CCI for September; 2021

New York, September 28, 2021…The Conference Board Consumer Confidence Index® declined again in September, following decreases in both July and August. The Index now stands at 109.3 (1985=100), down from 115.2 in August. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell to 143.4 from 148.9 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 86.6 from 92.8. 

“Consumer confidence dropped in September as the spread of the Delta variant continued to dampen optimism,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Concerns about the state of the economy and short-term growth prospects deepened, while spending intentions for homes, autos, and major appliances all retreated again. Short-term inflation concerns eased somewhat, but remain elevated. Consumer confidence is still high by historical levels—enough to support further growth in the near-term—but the Index has now fallen 19.6 points from the recent peak of 128.9 reached in June. These back-to-back declines suggest consumers have grown more cautious and are likely to curtail spending going forward.”

National new home sales metrics; August, 2021

New Home Sales
Sales of new single‐family houses in August 2021 were at a seasonally adjusted annual rate of 740,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development.
This is 1.5 percent (±15.1 percent)* above the revised July rate of 729,000, but is 24.3 percent (±19.1 percent) below the August 2020 estimate of 977,000.

Sales Price
The median sales price of new houses sold in August 2021 was $390,900. The average sales price was $443,200.

For Sale Inventory and Months’ Supply
The seasonally‐adjusted estimate of new houses for sale at the end of August was 378,000. This represents a supply of 6.1 months at the current sales rate.

Conference Board Leading Economic Indicators; August, 2021

NEW YORK, September 23, 2021…The Conference Board Leading Economic Index® (LEI)for theU.S. increased by 0.9 percent in August to 117.1 (2016 = 100), following a 0.8 percent increase in July and a 0.6 percent increase in June.

“The U.S. LEI rose sharply in August and remains on a rapidly rising trajectory,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “While the Delta variant—alongside rising inflation fears—could create headwinds for labor markets and the consumer spending outlook in the near term, the trend in the LEI is consistent with robust economic growth in the reminder of the year. Real GDP growth for 2021 is expected to reach nearly 6.0 percent year-over-year, before easing to a still-robust 4.0 percent for 2022.”

The Conference Board Coincident Economic Index® (CEI) for the U.S. increased by 0.2 percent in August to 105.9 (2016 = 100), following a 0.6 percent increase in July and a 0.5 percent increase in June.

The Conference Board Lagging Economic Index® (LAG) for the U.S. increased by 0.1 percent in August to 106.3 (2016 = 100), following a 0.5 percent increase in July and a 0.1 percent decrease in June.

National new home housing metrics; August, 2021

Building Permits
Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,728,000.
This is 6.0 percent (±1.4 percent) above the revised July rate of 1,630,000 and is 13.5 percent (±1.8 percent) above the August 2020 rate of 1,522,000. Single‐family authorizations in August were at a rate of 1,054,000; this is 0.6 percent (±1.3 percent)* above the revised July figure of 1,048,000. Authorizations of units in buildings with five units or more were at a rate of 632,000
in August.

Housing Starts
Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,615,000. This is 3.9 percent (±11.3 percent)* above the revised July estimate of 1,554,000 and is 17.4 percent (±12.1 percent) above the August 2020 rate of
1,376,000. Single‐family housing starts in August were at a rate of 1,076,000; this is 2.8 percent (±10.4 percent)* below the revised July figure of 1,107,000. The August rate for units in buildings with five units or more was 530,000.

Housing Completions
Privately‐owned housing completions in August were at a seasonally adjusted annual rate of 1,330,000. This is 4.5 percent (±11.1 percent)* below the revised July estimate of 1,392,000, but is 9.4 percent (±10.3 percent)* above the August 2020 rate of 1,216,000. Single‐family housing completions in August were at a rate of 971,000; this is 2.8 percent (±9.6 percent)* above the revised July rate of 945,000. The August rate for units in buildings with five units or more was 356,000.

Conference Board Employment Trends Index; August, 2021

NEW YORK, September 7, 2021…The Conference Board Employment Trends Index™ (ETI) increased for the sixth consecutive month in August, though the rate of increase has fallen. The index now stands at 110.37, up from 109.89 in July.

“The growth rate of the Employment Trends Index slowed in the past two months, reflecting the Delta variant’s impact on economic activity, especially in in-person services,” said Gad Levanon, Head of The Conference Board Labor Markets Institute. “We continue to monitor two trends which could put a damper on employment growth. First, the number of new COVID-19 infections continues to increase, holding back economic and job market recovery. 

“Second, the labor market continues to experience historical recruiting difficulties. According to a survey of the National Federation of Independent Business, 50 percent of small employers reported difficulty filling positions in August, an all-time high accompanied by rapidly rising wages. Towards the end of 2021, these severe labor shortages may ease as enhanced unemployment benefits expire and schools reopen, leading more workers to return to the labor market. We expect another month of subpar job growth in September, but strong job growth is likely resume in the last quarter of 2021. Since COVID-19 is not going away anytime soon, a return to normal spending on, and employment in, in-person services is unlikely to happen in 2021.”

August’s increase in the Employment Trends Index was driven by positive contributions from five of the Index’s eight components. From the largest positive contributor to the smallest, the components were: Initial Claims for Unemployment Insurance; Industrial Production; Ratio of Involuntarily Part-time to All Part-time Workers; Job Openings; and the Percentage of Firms with Positions Not Able to Fill Right Now. The three components that made negative contributions were, from largest to smallest, the Number of Temporary Employees; Real Manufacturing and Trade Sales; and Percentage of Respondents Who Say They Find “Jobs Hard to Get”.

The Employment Trends Index is a leading composite index for employment. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months. The Employment Trends Index aggregates eight leading indicators of employment, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying trends more clearly.

Comment on August Jobs Report by Gad Levanon, Head of the Labor Market Institute, The Conference Board

Today’s jobs report reflected the effects of both the COVID-19 Delta variant and the severe labor shortage in the US labor market.

Nonfarm payroll employment increased by just 235,000 in August, after an upwardly revised increase of 1,053,000 in July. The published unemployment rate ticked down from 5.4 to 5.2 percent, and the true rate, after adjusting for the misclassification error, declined from 5.7 to 5.4 percent. The number of jobs is still 5.33 million below February 2020 levels, with women representing 56.1 percent of these employment losses. The labor force participation rate remained unchanged at 61.7 percent.

The negative effects of the Delta variant on hiring and the economy were apparent in the August nonfarm payrolls print. In August, real-time statistics showed a significant drop in spending and mobility metrics on leisure-related categories. And consumer confidence declined in August as well. As a result, today’s jobs report showed slower employment growth in in-person services. After growing rapidly in recent months and being a major contributor to overall job growth (see chart below), in August there was no change in the number of jobs in the leisure and hospitality sector. In the previous COVID-19 surge from November 2020 to January 2021, employment in leisure and hospitality not only decelerated, but declined.

Meanwhile, wage data revealed that US labor markets remain tight. The unemployment rate continued to fall, and there were no signs that the severe labor shortage is easing. Wages are still increasing very rapidly. Average hourly earnings were up 6.2 percent (annual rate) over the past five months, signaling that employers are offering stronger incentives to attract qualified workers. Much of the acceleration in wages comes from the earnings of blue-collar and manual services industries such as leisure and hospitality and transportation.

Looking forward, the ongoing increase in the number of new infections is likely to lead to another subpar payrolls print in September. Towards the end of 2021, these severe labor shortages are likely to ease as enhanced unemployment benefits expire and schools reopen, leading more workers to return to the labor market.

Conference Board Consumer Confidence Index for August, 2021

New York, August 31, 2021…The Conference Board Consumer Confidence Index® declined in August, following a decrease in July (a downward revision). The Index now stands at 113.8 (1985=100), down from 125.1 in July. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell to 147.3 from 157.2 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 91.4 from 103.8.

“Consumer confidence retreated in August to its lowest level since February 2021 (95.2),” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Concerns about the Delta variant—and, to a lesser degree, rising gas and food prices—resulted in a less favorable view of current economic conditions and short-term growth prospects. Spending intentions for homes, autos, and major appliances all cooled somewhat; however, the percentage of consumers intending to take a vacation in the next six months continued to climb. While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead.

National new home sales metrics for July; 2021

August 24, 2021 ‐ The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced the following new residential sales statistics for July 2021:

NEW RESIDENTIAL SALES JULY 2021

New Houses Sold1
: 708,000

New Houses For Sale2
: 367,000

Median Sales Price: $390,500

New Home Sales
Sales of new single‐family houses in July 2021 were at a seasonally adjusted annual rate of 708,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 1.0 percent (±11.3 percent)* above the revised June rate of 701,000, but is 27.2 percent (±7.3 percent) below the July 2020 estimate of 972,000.

Sales Price
The median sales price of new houses sold in July 2021 was $390,500. The average sales price was $446,000.

For Sale Inventory and Months’ Supply
The seasonally‐adjusted estimate of new houses for sale at the end of July was 367,000. This represents a supply of 6.2 months at the current sales rate.