The latest Employment Trends Index released by The Conference Board, a research firm, shows growth in labor markets in upcoming months – an optimistic economic signal, especially in the wake of the subpar December jobs report. The index increased to 115.76 last month from an upwardly revised 115.72 in November, a small monthly gain, but a significant 5.2% year-over-year jump. The improvement is the fifth index increase in the last six months.
“Despite the disappointing job numbers for December, the improvement in the Employment Trends Index is signaling solid employment growth in the months ahead,” said Gad Levanon, director of macroeconomic research at The Conference Board. “With the labor force barely growing, partly due to the massive wave of baby boomers retiring, this job growth will continue to rapidly bring down the unemployment rate.”
The index, which aggregates eight different labor-market indicators, is designed to be a predictor of labor conditions. Fed-released industrial production numbers, job openings and jobless claims are among the data categories the index includes. The new report, if accurate, could prove the December jobs report an outlier. Last Friday, the U.S. Labor Department said only 74,000 jobs were created in December, a number that fell massively short of the 200,000 positions most analysts expected. Payroll processing firm ADP, often criticized for its estimates, said 238,000 jobs were added by private companies last month.