Key Takeaways:
The Conference Board's Employment Trends Index rose to 107.71 in July, pointing to continued labor-market resilience even as payroll growth stays modest.
The Conference Board's Employment Trends Index rose to 107.71 in July from an upwardly revised 106.74 in June, suggesting payroll growth will continue even as the labor market settles into a "low-hire, low-fire" pattern. The index, a leading composite gauge of payroll employment, had declined in both May and June before rebounding last month.
"The ETI rebounded in July after declining in May and June, suggesting continued resilience in the labor market, despite the 'low-hire, low-fire' backdrop," said Conrad Qi, economic data scientist associate at The Conference Board.
Positive contributions were led by the share of small firms reporting jobs "not able to be filled right now," which rose 4 percentage points to 36% in July from 32% in June — its highest level since June 2025 — and by initial claims for unemployment insurance, which fell to their lowest since September 2022. Job openings were estimated to have increased by 168,000 to 7.53 million, while employment in the temporary-help industry added 3,400 positions. The share of consumers reporting "jobs are hard to get" eased to 21.5% from 21.7%.
Still, the index sits only 0.6% above its level one year ago, suggesting payroll growth may remain modest in the months ahead. The largest negative contributor came from the share of involuntary part-time workers, which rose to 17.4% from 17.1% in June, with industrial production also weighing on the gauge.
The reading aligns with a broader picture of a resilient but cooling labor market. Nonfarm payrolls fell by 23,000 in July, dragged down by seasonal education-worker cuts and normalizing leisure-and-hospitality hiring after the FIFA World Cup, while the unemployment rate ticked down to 4.1% from 4.2%. Initial jobless claims held below 200,000 for a third straight week in early August, the longest such streak since 1969, when the US workforce was roughly half its current size.
The data has implications for Federal Reserve policy. The CME FedWatch Tool put the probability of a 25-basis-point rate hike in September at 43%, down from 67% a week earlier, as softer payrolls and contained claims cooled expectations for further tightening. The last time initial claims sustained such low levels, in the late 1960s, the Fed was in a tightening cycle that preceded a sharp slowdown — a reminder that a tight labor market alone does not guarantee policy restraint.
For the Fed, the question is whether modest but positive underlying job growth — roughly 30,000 private-sector jobs added in July — keeps the central bank on hold or pushes it toward action. With the next Employment Situation report due Sept. 4 and the Fed's September meeting following shortly after, the trajectory of hiring over the next two months will determine whether the current 43% odds of a hike hold or fade.
This article is for informational purposes only and does not constitute investment advice.
