May Shows Decline in The Conference Board Employment Trends Index with Potential Labor Market Risks
In a recent report, The Conference Board revealed that the Employment Trends Index™ (ETI) declined to 107.01 in May, a notable drop from the revised figure of 107.88 recorded in April. This index, which serves as a forward-looking indicator for payroll employment, is designed to signal potential future employment changes. A rising index typically suggests job growth, while a decrease may indicate upcoming contractions in the job market.
Despite the ETI’s recent downturn, it's essential to note that the payroll employment figures for May remained robust, with an increase of 172,000 jobs. Jannik Schulz, Economic Research Associate at The Conference Board, pointed out that even though May’s employment gains were encouraging, the underlying decrease in the ETI reveals possible vulnerabilities in the labor market. With five out of eight components of the ETI contributing negatively, there are worries about the sustainability of current employment growth.
The primary factor impacting the index was the proportion of small businesses reporting that they currently have jobs they cannot fill. This figure saw a significant reduction from 34% in April to 29% in May, marking the lowest point since May 2020. Despite a surge in job openings, surpassing 7.6 million in April, the increase was mainly driven by peculiar trends in the professional and business services sector, a momentum that may not be reliable moving forward.
Additionally, initial claims for unemployment insurance rose to 214,800 in May, although this remains lower than the same time last year. The steady conditions of real manufacturing and trade sales, along with industrial production, further contributed to the May decline, although these changes were minimal.
On a brighter note, there were some positive influences on the ETI. The proportion of involuntary part-time workers fell slightly to 17.4%, down from 17.9%, suggesting a better overall employment situation for those seeking full-time positions. Moreover, the percentage of consumers reporting difficulties in finding jobs decreased for the second consecutive month, landing at 18.6% in May, down from April’s 19.4%. Employment in the temporary help sector also experienced a positive trend, marking its consistent positive contributions to the ETI for five straight months in 2026, despite a smaller impact recorded for May.
The recent decline in the ETI is attributed to downward trends in five of its eight components, underscoring broader economic conditions. These include the percentage of firms struggling to fill vacancies, job openings, initial unemployment claims, and the stability of real manufacturing and trade sales and industrial production. Conversely, three factors provided a more positive outlook: the ratio of involuntary part-time workers to all part-time workers, the job-seeking difficulties reported by consumers, and temporary-help industry hiring.
The report also includes mention of standardized revisions to the Employment Trends Index, undertaken to update it with the latest source data and modifications. While these revisions offer clarity, they do not fundamentally alter the cyclical nature of the index. For further details, stakeholders can refer to The Conference Board’s official website.
The Employment Trends Index is comprised of eight forward-looking indicators that collectively create its composite score. These indicators encompass various metrics, including claims for unemployment insurance, job openings, and the temporary-help industry’s hiring patterns. Understanding these factors is crucial for those navigating the complexities of the current labor market and anticipating future trends.
The Conference Board continues to publish the ETI, offering valuable insights into employment trends, monthly at 10 a.m. ET following the official Bureau of Labor Statistics Employment Situation reports. As we progress further into 2026, watching these indicators will be vital in understanding employment dynamics within the economy.
For those interested in exploring this data further and accessing in-depth analysis, please visit the official website of The Conference Board.
Despite the ETI’s recent downturn, it's essential to note that the payroll employment figures for May remained robust, with an increase of 172,000 jobs. Jannik Schulz, Economic Research Associate at The Conference Board, pointed out that even though May’s employment gains were encouraging, the underlying decrease in the ETI reveals possible vulnerabilities in the labor market. With five out of eight components of the ETI contributing negatively, there are worries about the sustainability of current employment growth.
The primary factor impacting the index was the proportion of small businesses reporting that they currently have jobs they cannot fill. This figure saw a significant reduction from 34% in April to 29% in May, marking the lowest point since May 2020. Despite a surge in job openings, surpassing 7.6 million in April, the increase was mainly driven by peculiar trends in the professional and business services sector, a momentum that may not be reliable moving forward.
Additionally, initial claims for unemployment insurance rose to 214,800 in May, although this remains lower than the same time last year. The steady conditions of real manufacturing and trade sales, along with industrial production, further contributed to the May decline, although these changes were minimal.
On a brighter note, there were some positive influences on the ETI. The proportion of involuntary part-time workers fell slightly to 17.4%, down from 17.9%, suggesting a better overall employment situation for those seeking full-time positions. Moreover, the percentage of consumers reporting difficulties in finding jobs decreased for the second consecutive month, landing at 18.6% in May, down from April’s 19.4%. Employment in the temporary help sector also experienced a positive trend, marking its consistent positive contributions to the ETI for five straight months in 2026, despite a smaller impact recorded for May.
The recent decline in the ETI is attributed to downward trends in five of its eight components, underscoring broader economic conditions. These include the percentage of firms struggling to fill vacancies, job openings, initial unemployment claims, and the stability of real manufacturing and trade sales and industrial production. Conversely, three factors provided a more positive outlook: the ratio of involuntary part-time workers to all part-time workers, the job-seeking difficulties reported by consumers, and temporary-help industry hiring.
The report also includes mention of standardized revisions to the Employment Trends Index, undertaken to update it with the latest source data and modifications. While these revisions offer clarity, they do not fundamentally alter the cyclical nature of the index. For further details, stakeholders can refer to The Conference Board’s official website.
The Employment Trends Index is comprised of eight forward-looking indicators that collectively create its composite score. These indicators encompass various metrics, including claims for unemployment insurance, job openings, and the temporary-help industry’s hiring patterns. Understanding these factors is crucial for those navigating the complexities of the current labor market and anticipating future trends.
The Conference Board continues to publish the ETI, offering valuable insights into employment trends, monthly at 10 a.m. ET following the official Bureau of Labor Statistics Employment Situation reports. As we progress further into 2026, watching these indicators will be vital in understanding employment dynamics within the economy.
For those interested in exploring this data further and accessing in-depth analysis, please visit the official website of The Conference Board.
Topics General Business）
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