The Conference Board Employment Trends Index (ETI) Increased in March
Tuesday, April 6th, 2021
The Conference Board Employment Trends Index™ (ETI) significantly increased in March, after a small decrease in February. The index now stands at 102.44, up from 100.01 (a downward revision) in February. The index is currently up 7.7 percent from a year ago.
"The Employment Trends Index significantly increased in March and signals that job growth will be very strong over the coming months," said Gad Levanon, Head of The Conference Board Labor Markets Institute. "Despite the recent increase in infection rates, the vaccination campaign is progressing at a rate that should significantly reduce the spread of the virus in the next couple of months. Labor intensive in-person services will continue to reopen, and consumers flush with cash due to a year of elevated savings and strong government stimulus will be willing and able to spend. All this will lead to historically fast employment growth in the coming quarters. We expect the unemployment rate to reach about four percent a year from now, and further decline for the rest of 2022. Tight labor markets and labor shortages will resurface in the coming year, leading to faster wage growth."
March's increase was driven by positive contributions from seven of eight components. From the largest positive contributor to the smallest, the components were: Percentage of Respondents Who Say They Find "Jobs Hard to Get"; Initial Claims for Unemployment Insurance; Ratio of Involuntarily Part-time to All Part-time Workers; Real Manufacturing and Trade Sales; Industrial Production; Percentage of Firms With Positions Not Able to Fill Right Now; and Job Openings.
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.
The eight leading indicators of employment aggregated into the Employment Trends Index include:
Percentage of Respondents Who Say They Find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey®)
Initial Claims for Unemployment Insurance (U.S. Department of Labor)
Percentage of Firms With Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
Job Openings (BLS)**
Industrial Production (Federal Reserve Board)*
Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis)**
*Statistical imputation for the recent month
**Statistical imputation for two most recent months
The Conference Board publishes the Employment Trends Index monthly, at 10 a.m. ET, on the Monday that follows each Friday release of the Bureau of Labor Statistics Employment Situation report. The technical notes to this series are available on The Conference Board website: http://www.conference-board.org/data/eti.cfm.