Index suggests labor market still softening

The Conference Board's Employment Trends Index (ETI) continued a now year-long decline in July 2008, suggesting even more softening to come in the labor market. The index fell in July to 112.1, down 0.9 percent from June's revised figure of 113.1, and down more than 7.5 percent from July 2007.

“This economy remains too weak to stem the monthly loss in jobs,” said Gad Levanon, senior economist at The Conference Board. “Unless the labor market turns around soon, unemployment could pass 6 percent in early 2009 — and The Conference Board's Employment Trends Index isn't signaling any such improvement around the corner.”

The year-long fall in the ETI is seen in all eight of its components, Levanon said, most notably over the past six months in temporary-help hires and part-time workers for economic reasons. The ETI aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out so-called “noise,” to show underlying trends more clearly.

Technical notes to this series are available on the website at www.conference-board.org/economics/employment.cfm.

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