The Conference Board Employment Trends Index™ (ETI) decreased in August to 113.02, from a downwardly revised 114.71 in July. The Employment Trends Index is a leading composite index for employment. When the Index increases, employment is likely to grow as well, and vice versa. Turning points in the Index indicate that a change in the trend of job gains or losses is about to occur in the coming months.

"The ETI ticked down in August and has been on an overall declining trend since March 2022," said Selcuk Eren, Senior Economist at The Conference Board. "Nevertheless, the Index remains elevated, so job gains may continue over the coming months, but the rate of growth is likely to slow and eventually switch to job losses."

Eren added: "As anticipated, some industries are already shedding jobs, including information services and transportation and warehousing. August's ETI suggests that these pockets of weakness will eventually broaden to the rest of the labor market: For instance, the number of employees working in temporary help services—an important early indicator for hiring in other industries—has declined steadily since its peak in March 2022. Job openings—an indicator of opportunities available to workers—are also declining rapidly, though still remain above prepandemic levels."

"Consumer sentiment has begun to reflect a slowdown in what was a historically hot job market. In our Consumer Confidence Survey® for August 2023, the proportion of consumers saying jobs are 'hard to get' rose to a two-year high. Data in hand all point to further cooling in the labor market. Despite this softening, wage growth remains well above prepandemic levels and continues to stoke concerns over the impact on underlying consumer inflation. Consequently, the Federal Reserve may raise interest rates at least one more time before the end of 2023. Indeed, we expect the Fed's monetary policy tightening will trigger job losses in early 2024 and increase the unemployment rate."

August's increase in the Employment Trends Index was driven by negative contributions from six of its eight components: Percentage of Respondents Who Say They Find "Jobs Hard to Get", Ratio of Involuntarily Part-time to All Part-time Workers, Percentage of Firms with Positions Not Able to Fill Right Now, Number of Employees Hired by the Temporary-Help Industry, Initial Claims for Unemployment Insurance, and Real Manufacturing and Trade Sales.

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.