Economic Indicator Roundup: Adding the Employment Trends Index

I am slowly building my dashboard of economic indicators that I most regularly follow.  For each, I will try to give you a brief description, the latest reading and what I understand to be its implications.  For simplicity, I will assign each a rating of positive, neutral or negative.  Generally, a “positive” rating is consistent with economic growth that is close to or better than average, enough to sustain good job growth.  Neutral would imply slow or no economic growth but not a recession or worse.  Negative would be indicative of a slowdown or recession.

Employment Trends Index (link here)

From the actual description:

This new leading index for employment is highly correlated with employment, consistently provides leads before turning points in employment, and does not provide false

signals.

There are many indicators out there that describe what is going on with jobs (the labor market).  Eight of these have proven to be leading indicators for where employment is headed.  That is, when they improve, the general employment picture improves a bit later.  When these indicators get worse, employment gets worse a little down the road.  These eight indicators are combined into one index value for the Employment Trends Index (ETI) and published monthly by The Conference Board after each jobs report from the U.S. Bureau of Labor Statistics.

Latest Reading: 100.5 on Feb 7, 2011.  This represents the outlook for the labor market in January and is 0.2 points higher than the previous reading for December.  It is 7% higher than it was a year before.  According to one of the economists at The Conference Board, the result indicates that “employment growth is poised to accelerate.”

Economic Indicator Roundup (February 16, 2011)

NOTE: You may be reading an outdated analysis.  Please visit my latest economic indicators roundup.