The Conference Board's Employment Trends Index (ETI) gained to 111.14 in February from an upwardly revised 109.93 in January, originally reported as 109.38, and is up 3.2% from a year ago, the group announced Monday.
"As a result of the large increase in February, and positive revisions to earlier months, the Employment Trends index is signaling an improving employment environment," said Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board. "However, even though the labor market has gained in recent months, the looming sequester is likely to slow the pace of job creation in the near term."
The gain in ETI was driven by positive contributions from seven of its eight components. The rising indicators - from the largest positive contributor to the smallest - were percentage of firms with positions not able to fill right now, real manufacturing and trade sales, industrial production, employees hired by the temporary-help industry, ratio of involuntarily part-time to all part-time workers, job openings and initial claims for unemployment insurance, according to the Conference Board.
The ETI aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out so-called "noise" to show underlying trends more clearly.
The eight labor-market indicators aggregated into the ETI 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); Part-time Workers for Economic Reasons (BLS); Job Openings (BLS); Industrial Production (Federal Reserve Board); and Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis).