U.S. Employment Trends Index Signals Cooling Job Market

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The slowing jobs market in the U.S. is evident with a slight decrease in the Employment Trends Index for October, as reported by the Conference Board. The index dropped to 114.16 from 114.63 in September, continuing its downward trend since last spring.

Senior economist at The Conference Board, Selcuk Eren, stated that while the changes from month-to-month have been minimal, there are signs of cooling in the job market. Job gains have primarily been seen in industries grappling with severe labor shortages, potentially indicating that the economy has cooled sufficiently for the Federal Reserve to halt interest rate hikes in the current tightening cycle.

The Employment Trends Index is a composite index that combines eight indicators related to employment. Six of these indicators, including manufacturing and trade sales, industrial production, job openings, unemployment-insurance claims, and the proportion of firms with unfilled positions, all declined in October.

An increase in the index suggests a likely increase in employment, while turning points in the index indicate potential shifts in job numbers in the short term.

This weaker reading aligns with other indicators pointing towards a slowdown in the U.S. jobs market. Labor Department figures from last week revealed that only 150,000 jobs were added to the economy in October, half the previous month’s gain and the smallest monthly increase since June.

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