The Conference Board Employment Trends Index (ETI) decreased in July 2022 to 117.63—down from a downwardly revised 118.71 in June. The ETI is a leading composite index for employment. When the index decreases, employment is likely to decrease as well, and vice versa. Turning points in the index indicate that a turning point in the number of jobs is about to occur in the coming months.

"The Employment Trends Index declined in July and has now been on a downward trend since March 2022," said Frank Steemers, Senior Economist at The Conference Board. "While the US labor market is currently still robust, the recent behavior of the Index signals that slower job gains should be expected over the next several months. This would bring the labor market in line with the rest of the economy, where economic activity has already been slowing."

Steemers added: "It is increasingly likely that the US economy will fall into recession by yearend or early 2023, with the Fed expected to continue raising interest rates rapidly over the coming months. While businesses are currently still struggling with severe labor shortages, they may soon see some reduced pressure in recruitment and retention difficulties as economic activity cools. Depending on the severity of the recession, some months of negative jobs growth are possible over the year ahead. However, The Conference Board expects the unemployment rate—just 3.5 percent as of July 2022—to remain below 4.5 percent in 2023."  

July's decrease in the Employment Trends Index was driven by negative contributions from six of its eight components. From the largest negative contributor to the smallest, these were: Initial Claims for Unemployment Insurance, Ratio of Involuntarily Part-time to All Part-time Workers, Percentage of Respondents Who Say They Find "Jobs Hard to Get", Real Manufacturing and Trade Sales, Percentage of Firms with Jobs Not Able to Fill Right Now, and Industrial Production.

The Employment Trends Index aggregates eight 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 trends more clearly.