The US May Employment Trends Index went up to 118.58 from 117.32 in April, says The Conference Board. The Employment Trends Index (ETI) was 5.4% higher than in May 2013.
Gad Levanon, Director of Macroeconomic Research at The Conference Board, said:
“The Employment Trends Index continues to signal solid job growth with an improvement in each of its eight components in the first five months of 2014.”
“The need for employers to rapidly expand their payroll in light of strengthening economic activity is a major factor in the rapid decline in the unemployment rate.”
Seven of 8 components did well
Of the eight components that make up the ETI, seven contributed positively to May’s figure.
Below is a list of the ETI components in order of size of their positive/negative contributions:
- Industrial Production
- Initial Claims for Unemployment Insurance
- Real Manufacturing and Trade Sales
- Ratio of Involuntarily Part-time and All Part-time workers
- Number of Temporary Employees
- Job Openings
- Percentage of Respondents Who Say They Find “Jobs Hard to Get”
- (negative) Percentage of Firms With Positions Not Able to Fill Right Now
The Conference Board says the Employment Trends Index is highly correlated with employment and consistently provides leads before changes in employment occur, “and does not provide false signals.” The ETI is more closely linked to employment behavior than its individual components are. It makes it easier to forecast employment and the unemployment rate.
Last week the Bureau of Labor Statistics reported that 217,000 extra jobs were created in May, less than the 282,000 created in April. The unemployment rate, at 6.3%, remained unchanged after declining by 0.4% in April.
Unemployment fell nearly 2m in one year
There were 9.8 million unemployed Americans in May, 1.9 million fewer than in May 2013.
Long-term unemployment, i.e. the total number of people out of work for 27 weeks or more, stood at 3.4 million in May, 979,000 fewer than in May 2013. The long-term unemployed represent 34.6% of the total US unemployment figures.
A Brookings Institution study found that only 11% of long-term jobless Americans ever manage to regain sustainable and meaningful jobs.
US Secretary of Labor Thomas E. Perez made the following comment on May’s unemployment figures:
“The economy in May continued its steady recovery from the Great Recession, and we have now added 9.4 million new private-sector jobs over 51 consecutive months. The economy generated 217,000 new jobs in May – the fourth consecutive month exceeding 200,000 new jobs – and the unemployment rate held steady at 6.3 percent.”
“We must take steps to help those individuals who are still feeling the lasting effects of the recession. 3.4 million people experiencing long-term unemployment.”
Many workers think economy is weakening
Randstad’s Employee Confidence Index for May showed that US workers are split three ways, with 33% believing the economy is getting stronger, 35% saying it is getting weaker, and 35% commenting that it is staying the same.
Forty-six percent of workers interviewed thought there were fewer jobs around in May, compared to 26% who believed there were more.