An index which measures U.S. employment trends rose again in June, signaling that the labor market further healed from the pandemic-induced shock, data from the Conference Board showed Tuesday.
The Conference Board Employment Trends Index stood at 109.84 in June, up from a revised 107.70 in May. The index is up 28.2% from the same month 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 850,000 jobs, an acceleration from the 583,000 job gains in May. The data suggested there is robust demand for workers and signs that many Americans came off the sidelines to resume job seeking.
The very rapid improvement in the index in June suggests that strong job growth will continue through the summer, said Gad Levanon, head of the Conference Board Labor Markets Institute.
However, the labor market is likely to tighten. “Recruiting and retention will remain extremely difficult, and wage growth will remain very high,” he said.
Labor shortages are likely to moderate at year end as some of the labor supply constraints ease, Mr. Levanon said. Unemployment may again dip below 4% within the next year, and a tight labor market is likely to be the new normal until the next recession, he said.
The Employment Trends Index aggregates eight labor market-related indicators to show underlying trends in employment conditions.
The rise of the headline index in June was driven by positive contributions from seven of the eight components, which from the largest positive contributor to the smallest are the ratio of involuntarily part-time to all part-time workers, initial claims for unemployment insurance, the number of temporary employees, the percentage of respondents who say they find jobs hard to get, industrial production, job openings, and real manufacturing and trade sales.
The only indicator which didn’t contribute positively to the index is the percentage of firms with positions not able to fill right now.
Source: Dow Jones