Sept. ETI falls, although six components rise

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The Conference Board's Employment Trends Index (ETI) slid to 110.77 in September from an upwardly revised 111.18 in August, first reported as 110.88, and is up 6.7% from a year ago, the group announced Monday.

The base year of the composite index is 2016=100.

"Despite this month’s decline – the result of just two components – the index remains on a solid upward trend, and has been growing rapidly in recent months," said Gad Levanon, chief economist, North America, at The Conference Board. "The US economy is very strong now. Demand for workers is likely to continue growing rapidly in the coming quarters, but with the unemployment rate now at 3.7 percent, recruiters have their work cut out for them. They will have to bring more people off the sidelines faster. In the meantime, businesses will have to squeeze more out of their current workers, either by increasing working hours or raising labor productivity. Labor market tightness varies across occupations and geographies. However, for the nation we expect the unemployment rate to go down to 3.5 percent or even lower in 2019. We also expect labor force participation and productivity to gradually increase, and wages to further accelerate."

The decreasing indicators — from the largest contributor to the smallest — were: the ratio of involuntarily part-time to all part-time workers, and the percentage of respondents who say they find “jobs hard to get,” 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).

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