The labor market remains active but is cooling off, the Conference Board said, a trend it expects to continue until 2024’s second quarter, when job losses will begin. The board expects the unemployment rate will rise to 4.3% during the second half.
The organization’s Employment Trends Index dropped to 113.05 in November, from 113.09 the month before. The index is a composite index for employment. When it increases, employment is likely to grow. Turning points indicate that a change in the trend of job gains or losses can be expected to occur in the coming months.
“While the index is still elevated compared to its pre-pandemic level – and job gains are expected to continue in December and early 2024 – the labor market shows clear signs of cooling with fewer opportunities available for jobseekers,” said Conference Board Senior Economist Selcuk Eren.
The ETI peaked at 120.56 in March 2022.
Flat, Edging Down
Over the last six months, payroll employment growth has been flat or negative, with the exception of jobs in healthcare and social assistance, leisure and hospitality, and government, Eren said. The number of workers in temporary help services, an early indicator for hiring in other industries, resumed its decline in November after peaking in March 2022. Initial unemployment claims increased for a second consecutive month in November.
November’s ETI decrease was driven by slumps in the percentage of respondents who said jobs were to get, percentage of businesses who had positions they were unable to fill, the number of employees hired by the temporary help industry, and the change in initial unemployment claims.
Hints of Optimism
The Conference Board’s not alone in its downer of an outlook for 2024. Recently, the Federal Reserve projected the unemployment rate would rise from 3.7% in November 2023 to 4.1% in December 2024.
Still, other figures paint a rosier picture. More than half of U.S. employers plan to add new permanent positions during the first six months of 2024, said Robert Half. Another 39% anticipate hiring for vacated positions. But that may not be easy. Robert Half’s survey found 90% of hiring managers report difficulty finding skilled professionals, and 58% said it takes longer now to hire for open roles than it did a year ago.
And, the majority of hourly workers (51%) are optimistic about their ability to switch jobs easily or grow in their current position, according to the payments platform Branch.