The Conference Board reported today that its composite Employment Trends Index, based on eight individual labor-market indicators (including both hard economic data and confidence measures), increased in January for the fourth consecutive month. The index increased to 100.5 in January from 100.3 in December, and is now above its year-ago level by 7%, and above its cyclical mid-2009 low by 20 points (see chart above).
Says Gad Levanon, Associate Director, Macroeconomic Research at The Conference Board:
Despite anemic job gains in January, the Employment Trends Index suggests that employment growth is poised to accelerate. Both hard economic data as well as confidence measures have improved, and since employment growth typically lags, we expect larger numbers of jobs to be added back into the economy in the coming months.
The Employment Trends Index has been an accurate leading indicator of trends in payroll employment back to 1973. In that case, the ongoing gains in the index and the 20-point gain since mid-2009 predict that we can look for gradual improvements in labor market conditions in the months ahead.