Index Signals Job Growth Will Stall in the Second Half of 2024
Washington DC, May 24, 2024… The Employment Outlook Index (EOI) decreased in April to 110.25, from a downwardly revised 111.16 in March. The Employment Outlook Index is a leading composite index for employment. When the Index decreases it shows a likely reduction in employment going forward.
The fall in the EOI indicates that employment could fall, or grow more slowly, in the third quarter of 2024.
The EOI has been trending down since a peak in the first quarter of 2022. This latest report is a continuation of that trend.
Since the pandemic recession, employment has experienced strong growth. But higher interest rates tend to reduce economic activity and cause rates of employment to cool.
It’s difficult to know for certain whether cooling employment will result in job losses, but the current job openings don’t seem to match well with prospective employees.
Some firms have laid off workers recently in an effort to cut expenses, but many firms are reluctant to lay off workers when they’re not certain how many employees they may need in the near term.
As a result, employment may be slightly overstated as employers are reluctant to lay off workers.
The Employment Outlook Index aggregates six leading indicators of employment, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out “noise” to show underlying Outlook more clearly.
The eight leading indicators of employment aggregated into the Employment Outlook Index include:
▪ Percentage of Respondents Who Say They Find “Jobs Harder to Get”
▪ Initial Claims for Unemployment Insurance (U.S. Department of Labor)
▪ Percentage of Firms with Positions Not Able to Fill Right Now (© National Federation of Independent Business Research Foundation)
▪ Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics)
▪ Ratio of Involuntarily Part-time to All Part-time Workers (BLS)
▪ Job Openings (BLS)*
