Conference Board's Employment Trends Index Increased in May

By Xavier Fontdegloria

An index which measures U.S. employment trends continued to rise in May, suggesting the labor market kept recovering from the hit of Covid-19 pandemic, data from the Conference Board showed Monday.

The Conference Board Employment Trends Index stood at 107.35 in May, up compared with a revised 104.31 in April. The indicator is up 39.4% from a year ago.

The release of the index follows Friday's employment report from the Bureau of Labor Statistics which showed the U.S. labor market added 559,000 jobs, an acceleration from the 278,000 payrolls created in April but lower than expected by economists. The data continued to signal hiring difficulties amid widespread labor shortages.

In the past three months, the Conference Board's indicator grew much faster than any other three-month period in the history of the index prior to the pandemic. This marked acceleration suggests historically strong job growth in the coming months, Gad Levanon, head of the Conference Board Labor Markets Institute, said.

Despite the strong outlook, most recent data strongly reinforces a trend of growing labor shortages, he said.

"Job shortages are likely to be more acute in those states that opened first, less in those that still have restrictions," Mr. Levanon said. Toward the end of 2021, labor shortages are likely to ease as some of the labor supply constraints moderate, he said.

The Employment Trends Index aggregates eight labor market-related indicators to show underlying trends in employment conditions.

May's rise was driven by positive contributions from all of the eight components, which from the largest positive contributor to the smallest are initial claims for unemployment insurance, the percentage of respondents who say they find jobs hard to get, industrial production, the percentage of firms with positions not able to fill right now, job openings, real manufacturing and trade sales, the number of employees hired by the temporary-help industry and the ratio of involuntarily part-time to all part-time workers.

Write to Xavier Fontdegloria at [e-mail]

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06-07-21 1026ET