The Conference Board Employment Trends Index (ETI) rose slightly in May, a possible sign of improved economic recovery. The ETI, a leading composite index for employment, rose from 110.48 in April to 111.4 in May. In the past, when the ETI increased, employment opportunities would follow into the second quarter, according to The Conference Board, a member driven think tank.

“The ETI rose in May, another small oscillation that we have continued to observe since the ETI started the downward trajectory it's been on since a peak in March of 2022,” said Will Baltrus, associate economist at The Conference Board. “May's uptick signals employment could increase in the second half of 2024, but the ETI's longer-term downward trajectory signals the high level of monthly increases in employment observed post-pandemic could slow down. That said, the Index remains far above its pre-pandemic level, which suggests aggregate job losses are less likely than a deceleration in hiring.”

According to The Conference Board, May's payrolls data showed an increase in employment by 272,000, the 40th consecutive month of growth. Job gains were also seen in the health care, government and social assistance sectors.

“This report shows again that the labor market remains resilient. Coincident labor shortages and difficulty hiring during the pandemic suggests employers will likely continue to hold on to workers,” said Baltrus. “This is corroborated with Q2 data from the CEO Confidence Survey, which shows a decrease in the amount of CEOs that are expecting to add to or cut from their workforce, and an uptick in the proportion of CEOs that expect 'little change' into expansion or reduction of their workforce.”

Baltrus noted that May's payroll data also showed a slight uptick in the unemployment rate to 4.0 percent. He added, despite this slight uptick, the labor market still exhibits signs of tightness.  

“According to our Consumer Confidence Survey, the share of respondents who report “jobs are hard to get” declined in May to 13.5 percent, a sign that job seekers still have options when looking for employment. Moreover, the share of firms that report “jobs are hard to fill” rose to 42 percent in May, a sign that employers are struggling to find suitable applicants for positions,” he said. 

Baltrus believes May's increase in the ETI was driven by positive contributions from several components, including the percentage of respondents who said they find “jobs hard to get,” job openings and the percentage of firms with positions they are not able to fill right now.

“Existing labor market tightness is expected to be exacerbated by retirees outpacing entrants into the labor force, which suggests job cuts may not happen any time soon,” Baltrus concluded.