Economic Trends Index Rises, But S-L-O-W-L-Y

Another sign of the weak U.S. recovery: The Conference Board’s Employment Trends Index, released this morning, added three-tenths of a point in July, and now stands at 97.0.

To put this into perspective, the ETI stood at 100 in 1996, shortly after the economy began its Internet-fueled meteoric rise. By 2000 it was past 120 on its way (but not quite reaching) 130.

Though the ETI is now 9.8 percent higher than it was a year ago, its growth has slowed significantly in the last three months. In May, the index was 96.1. In April it was 95.2  and in March it was 93.9. June’s index was 96.7.

“The growth rate of the Employment Trends Index slowed sharply in the past three months, suggesting that employment growth will remain too weak to keep up with the increase in the working-age population,” said Gad Levanon, associate director, Macroeconomic Research at The Conference Board. “The disappointing employment numbers may indicate that the low levels of household spending and confidence are making businesses more cautious when it comes to hiring.”

Though there are several indices of economic health and trends compiled by The Conference Board, its Economic Trends Index is unique in that it is a composite of multiple measures. Among other things, it takes into account initial unemployment claims filed, the number of temp workers hired as reported by the U.S. Bureau of Labor Statistics, the Federal Reserve’s Industrial Production Index, and the percentage reporting they find “Jobs Hard to Get” from The Conference Board’s own Consumer Confidence Survey.

According to The Conference Board, “The main benefit of looking at a composite index is that individual indicators sometimes show erratic movements from month to month that do not necessarily reflect underlying trends.”

The Economic Trends Index reinforces what the Bureau of Labor Statistics reported Friday: the unemployment rate was unchanged, while new, private sector jobs created in July was a mere 71,000, less than half what economists estimate is needed to keep pace with workforce growth.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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