The Conference Board Monday reported the first improvement in its Employment Trends Index in 16 months, but it tempered the encouraging news with a hard dose of reality.
The index for May rose a fraction to 89.9 from an adjusted 89.7 for April and remains substantially below the 113 reported for May 2008. Improvements were registered in four of the eight components followed by The Conference Board and, of these, three — the percentage of firms with jobs not able to fill right now, job openings and real manufacturing and trade sales — were based on estimates. The only one of the four ascendant components not based on an estimate was the “jobs hard to get” measure included in The Conference Board’s own Consumer Confidence Index. That number declined to 44.7 in May from 46.6 in April as the Consumer Confidence Index leaped to 54.9 from 40.8 in April.
“While it is too early to say that the ETI has bottomed, the moderation of the last two months is certainly a sign that the decline in job losses is real and signals that the worst is over,” said Gad Levanon, senior economist at The Conference Board.
But he sounded a strong cautionary note for anyone inclined to take the data as a sign that a full-blown recovery is under way: “However, as the economic recovery over the coming months is likely to be very slow, we still expect the unemployment rate to continue to increase to double digits by the end of this year and into 2010.”
On Friday, the Labor Department reported a slowing in the number of jobs lost for May — the 345,000 payroll slots vacated was the lowest since September — but still put the nation’s unemployment rate at 9.4 percent.
The components of the ETI showing continued deterioration last month were initial claims for unemployment insurance, the number of temporary employees, the ratio of involuntary part-time to all part-time workers and the Federal Reserve Board’s industrial production total index.