Tag: labor market

Employment trends index shows slowdown in positive job growth

Following the US Bureau of Labor Statistics’ monthly employment bulletin report, the Conference Board Employment Trends Index was released on 6 June 2022. The employment index indicated a slowdown in job growth in the months ahead.

Despite job growth remaining positive, the measure moved downward from a reading of 120.60 in April to 119.77 in May.

Sectors involving leisure and hospitality as well as in-person services have not yet completely recovered from their Covid-linked job losses. However, with consumers likely to move from spending on goods to services, these industries will likely see some employment growth.

Agron Nicaj, Associate Economist at The Conference Board, commented: “The labor market may have less room for more growth with overall employment down only 0.5% compared to the pre-pandemic level.”

“The labor market remains strong amid high inflation, and the Federal Reserve is likely to continue its focus on stabilizing prices as a result,” but “a strong response by the Fed risks higher unemployment rates by the end of 2022.”

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Talent shortages continue to hinder the market

According to the Institute for Supply Management’s “Services ISM Report on Business” activity in the US services economy expanded in April, but growth decelerated from March.

The report revealed that the Services PMI index fell to a reading of 57.1% in April from 58.3% in March. Readings above 50% indicate expansion.

According to Anthony Nieves, Chair of the ISM’s Services Business Survey Committee, a restricted labor pool is what impacted the index along with a noted slowing of new orders

Anthony Nieves made comment: “Business activity remains strong; however, high inflation, capacity constraints and logistical challenges are impediments, and the Russia-Ukraine war continues to affect material costs, most notably of fuel and chemicals.”

Data for the report is based on a survey of purchasing and supply executives across the US. A few firms surveyed for the report commented on labor concerns.

“Talent shortages continue to make it difficult to get work done at companies across many industry sectors,” said one firm. “Light industrial labor is in high demand, but supply gaps still exist. Wages continue to rise in nearly all labor categories, contributing to the rise in prices of goods and services.”

Another respondent commented: “Inflation, supply chain issues and access to qualified workers continue to be issues. There are still lingering effects from the pandemic, although those seem to be subsiding. The future impacts of the war in Ukraine are unclear.”

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