U.S. employment continues to grow, although at a slower pace. Last week, the U.S. Bureau of Labor Statistics reported that unemployment has dropped to 7.9 percent and 661,000 jobs were added in September. So far, 52 percent of the 22 million jobs lost between February and April have been recovered, although the pace of growth is slowing.
The Conference Board’s Employment Trends Index (ETI) mirrors these results, with an increase in September, following growth in May, June, July and August. The index now stands at 54.8, up from 53.3 in August.
“The Employment Trends Index increased again in September, but over the last two months its gains have been more modest, indicating that job growth may be slowing down,” says Gad Levanon, head of The Conference Board Labor Markets Institute. “The labor market has rebounded better than expected, but with the virus still proliferating, it will not be able to return to its full capacity anytime soon. Many companies are restructuring their organizations and layoff rates are high. Despite the U.S. economy growing more slowly, it may still be able to generate a million new jobs by year’s end.”
Speaking on the U.S. Bureau of Labor Statistics’ report, Levanon adds, “We expect the U.S. growth and jobs revivals to continue to decelerate in the coming months as the number of new COVID-19 cases is growing, layoff rates remain high and weaker government stimulus limit the spending capacity of many households. As long as the risk of contagion remains high, total employment may remain well below pre-pandemic levels. The economy would need to add five-to-six million jobs to return to normal unemployment rates in the four-to-five percent range.
The Conference Board’s 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 “noise” to show underlying trends more clearly. September’s increase was fueled by positive contributions from all eight labor markets.
