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.