Leading Employment Indicator Predicts Dip in Jobs

People wait for the JobNewsUSA.com South Florida Job Fair to open at the Amerant Bank Arena in Sunrise, Fla., on June 26, 2024. Joe Raedle/Getty Images

A leading indicator signaled a potential loss of jobs over the next few months amid weaker January employment data.

The Conference Board’s Employment Trends Index (ETI) declined from 109.23 in December to 108.35 in January, the Conference Board said in a Feb. 10 statement. A decrease in the index value indicates that employment numbers are likely to decline.

This past week, data from the Bureau of Labor Statistics showed that the U.S. economy added 143,000 new jobs in January, which was not only lower than expected but also a decline compared with the 307,000 jobs added in December.

On the positive side, the unemployment rate dipped from 4.1 to 4 percent, beating investor expectations. Wage growth and labor force participation all ticked up.

“While jobs weren’t exceptional by any means, a lower unemployment rate and a strong increase in wage growth means the labor market is still healthy,” Bryce Doty, senior portfolio manager and senior vice president at Sit Investment Associates, told The Epoch Times.

Chris Zaccarelli, chief information officer for Northlight Asset Management, said that even though job growth could be slowing down, January tends to be a “noisy month” as the jump in holiday hiring eases.

“While we remain cautiously optimistic in early 2025, we see much more downside potential this year than we have in the prior two years and believe now is a time for caution and a dialing back of risk-taking.”

Mitchell Barnes, an economist with The Conference Board, said that even though the ETI declined last month, the fall came after “three consecutive monthly gains.”

“While the labor market has cooled from its 2022 pace, metrics through January are broadly in line with the pre-pandemic labor market,” he said. “Overall, January data reaffirms that the labor market remains stable.”

“High employment levels, sustained real wage growth, and steady labor demand continue to support economic momentum.”

The ETI is an aggregate of eight leading employment components. In January, five of the eight were negative.

The share of people who said jobs were “hard to get” rose for the first time in four months. The share of small companies reporting jobs that were “not able to be filled right now” remained steady.

Job Cuts and Hiring

A recent report from global outplacement company Challenger, Gray & Christmas, Inc. showed that employers based in the United States announced 49,795 job cuts in January, up 28 percent from a month back. On an annual basis, however, the figure is down 40 percent. This was the lowest January number of cuts since 2022.

“January was relatively quiet in terms of job cut announcements,” said Andrew Challenger, senior vice president of the company. “However, we’ve already seen major announcements in the early days of February, so it seems this quiet is unlikely to last.”

Last year, the number of job cut announcements had risen by 5.5 percent to hit 761,358, which was the highest annual total since 2009, except for 2020.

According to Andrew Challenger, companies went through “extraordinary change” last year, citing changing economic conditions and rapid technological advancements.

“Most employers are anticipating additional uncertainty with the upcoming administration, which is leading to slower hiring and more layoffs in the short term from various sectors,” he said.

Hiring plan announcements by employers in January were down 24 percent from the previous month but higher by 13 percent from a year back. This was the lowest January total on record.

Negative View of Recent Grads

Recent college graduates could end up facing a tougher time getting hired this year as many hiring managers carry negative perceptions about them, according to a recent survey by educational research resource website Intelligent.com.

The survey, done at the end of December, polled 1,000 American managers who hire workers for entry-level positions.

One in eight said they intended to avoid hiring recent college grads this year. A third said the recent graduates lacked work ethic, and 24 percent said the grads were unprepared for the workforce.

Managers complained that many graduates struggled with eye contact and were not dressed appropriately during interviews. Last year, 55 percent fired a recent college grad they had hired.

“Recent college graduates should be aware of the negative perceptions and biases that exist against them,” said Huy Nguyen, Intelligent’s chief education and career development adviser.

“By understanding what frustrates managers the most and taking an intentional approach to interviewing, candidates can increase their chances of making a good impression and standing out among the sea of other applicants.”

Andrew Moran contributed to the report.