USD Retreating Today Despite More Positive US Employment Data

US employment has been showing a weakening trend during this year, but the NFP on Friday and the CB Employment Trends show improvement. The US labour market has been quite strong since the pandemic started and then with the massive interest rate hikes by the FED, keeping the US economy afloat.

But, in 2024 we were seeing weak jobs reports, which showed that a softening trend was forming. That was keeping the USD soft as well, but the Non-Farm Employment numbers last Friday were quite strong which supported the USD, while today the Conference Board Employment Trends also showed a decent improvement.

US Employment Trends for May 2024

• Overview:

  • The Employment Trends Index (ETI) for May 2024 increased to 111.44 points from a revised 110.48 points in the prior month.
  • This uptick was primarily driven by positive contributions from six out of eight components of the index.

  Key Components Driving the Increase:

  1. Percentage of Respondents Finding Jobs Hard to Get:
     • Decrease in the number of respondents reporting difficulty in finding jobs, indicating improved labor market conditions.
  2. Job Openings:
     • Increase in job openings, suggesting growing demand for labor.
  3. Percentage of Firms with Unfilled Positions:
     • Rise in the percentage of firms unable to fill vacant positions, indicating potential labor shortages.
  4. Ratio of Involuntarily Part-time to All Part-time Workers:
     • Decrease in the ratio of involuntary part-time workers, signaling improved employment stability.
  5. Industrial Production:
     • Growth in industrial production, reflecting economic expansion and potential job creation in manufacturing sectors.
  6. Real Manufacturing and Trade Sales:
     • Increase in sales activity in manufacturing and trade sectors, indicating higher demand and potential for employment growth.

The ETI’s upward movement suggests an increase in employment in the second half of 2024, which is another positive news for this sector after the strong NFP report last Friday. However, the longer-term trajectory shows a deceleration in hiring compared to the post-pandemic recovery period. Despite this slowdown, the index remains significantly above its pre-pandemic level, indicating overall resilience in the labor market.

Conference Board Expert Commentary:

Will Baltrus, Associate Economist at The Conference Board, notes that while May’s uptick signals potential employment growth, the ETI’s downward trend since March 2022 suggests a slowdown in hiring momentum. Nevertheless, the index’s current level remains well above pre-pandemic levels, indicating a lesser likelihood of aggregate job losses.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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