WASHINGTON (dpa-AFX) - A leading indicator for payroll employment in the U.S. decreased in June, extending the declining trend over the past several months, and a signaled a slowdown in payroll hiring in the second half of the year, survey data from the Conference Board showed Monday.
The Conference Board Employment Trends Index fell to 110.27 in June from a downwardly revised 111.04 in May.
When the Index increases, employment is likely to grow as well, and vice versa, and turning points in the index indicate that a change in the trend of job gains or losses is about to occur in the coming months, the think tank said.
June's decrease in the Employment Trends Index was driven by negative contributions from four of its eight components - percentage of firms with positions not able to fill right now, number of employees hired by the temporary-help industry, initial claims for unemployment insurance, and job openings.
'The ETI fell in June, continuing the downward trajectory observed since the measure peaked in March 2022,' Will Baltrus, associate economist at The Conference Board,' said.
'June's ETI downtick signals employment could fall in the second half of 2024.' Meanwhile, the index remains above its prepandemic level, and payrolls growth remains healthy, albeit at a reduced pace compared to the outsized gains experienced during the pandemic recovery, the economist observed.
'While June's ETI suggests an aggregate reduction in employment ahead, we anticipate the labor market will only cool modestly. Indeed, as long as companies are willing to retain workers, net nonfarm payrolls are likely to remain positive,' Baltrus added.
The CB survey showed that 37 percent of firms reported difficulty in filling jobs are right now, which remains well above the average of 23 percent observed between July 2009 and January 2020, the period following the financial crisis and immediately preceding the pandemic.
This share is expected to remain elevated as Baby Boomers retire, the Conference Board said.
Further, companies are hesitant to downsize payrolls amid a slowing economy because the weakness may be transitory, and rehiring workers after an economic soft patch may be more expensive given persistent labor shortages.
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