NEW YORK, March 10, 2025 /PRNewswire/ -- The Conference Board Employment Trends Index™ (ETI) declined in February to 108.56, from an upwardly revised 109.45 in January. The Employment Trends Index is recognized as a leading composite index for payroll employment patterns. An increase typically suggests employment is poised to grow, whereas a decline, such as this, indicates potential job losses on the horizon.
According to Mitchell Barnes, Economist at The Conference Board, "The ETI fell in February to its lowest level since October. Growing policy uncertainty is beginning to weigh on business and consumer sentiment, with more substantial impacts from federal layoffs and funding disruptions expected in the months ahead." This reduction reflects broader apprehension across the employment sector.
The results for the month indicate concerning trends; the share of consumers reporting 'jobs are hard to get' rose by 1.8 percentage points, coupled with the number of small firms struggling to fill positions climbing from 35% to 38%. This marks the largest monthly increase recorded in close to a year, illustrating deteriorated perceptions of the labor market.
Despite remaining relatively stable, overall economic activity indicators like Real Manufacturing and Trade Sales and Industrial Production are presenting cautionary signals. "While recently announced federal and private sector layoffs weren't fully captured in February's Employment Report, several ETI components show potential early-warning signs of wavering conditions," Barnes noted.
Supporting this is the uptick of 3.4% in initial claims for unemployment insurance, rising to 224,000. The proportion of involuntary part-time workers also increased significantly from 16.7% to 18%, reaching its highest level since 2021. The temporary-help industry recorded declines as well, with total losses of 22,000 jobs over the first two months of 2025.
Barnes added, "The jobs market remains healthy overall, but risks of a slowdown are undeniably surfacing. Businesses may become more cautious, and if this uncertainty prolongs, it could lead to more significant weaknesses within the labor market soon. Despite achieving a resilient finish to 2024, the momentum within the US labor market is clearly at risk."
Factors driving February's drop in the Employment Trends Index stem from adverse contributions from five of its eight components: The Ratio of involuntarily part-time to all part-time workers, the percentage of respondents who say 'jobs are hard to get', initial unemployment claims, the number of hires by the temporary-help industry, and the percentage of firms facing difficulties filling open roles.
This Employment Trends Index aggregates eight leading indicators of employment, effectively filtering out 'noise' through its composite design to shed light on underlying trends. These indicators include the percentage of respondents perceiving job challenges, initial unemployment claims, the number of industry hires, and the ratio of involuntary part-time workers, among others.
The Conference Board maintains rigorous publishing of the Employment Trends Index, producing monthly reports at 10 AM ET each month, helping to keep stakeholders informed about shifts in employment trends. For more insights, readers can refer to the Conference Board's official publication schedule.