Employment Index in U.S. Drops for Third Time in Four Months
A measure of job prospects in the U.S. fell in July for a third time in four months, reflecting declines in consumer confidence and help-wanted that indicate payroll gains will fail to accelerate in the second half of the year.
The Conference Board’s Employment Trends Index decreased 0.3 percent to 100.6 from the prior month’s reading of 100.9, the New York-based private research group said today. The measure was up 4 percent from July 2010.
Today’s figures come on the heels of a Labor Department report last week that showed payrolls rose by 117,000 workers in July and the unemployment rate fell to 9.1 percent as discouraged workers left the labor force. Larger job gains are needed to keep consumers spending and the economy growing.
The index “is signaling employment growth of less than 100,000 per month through the end of 2011,” Gad Levanon, associate director of macroeconomic research at the Conference Board, said in a statement. “There is simply not enough growth in production to warrant stronger hiring.”
The Employment Trends Index aggregates eight labor-market indicators to forecast short-term hiring trends. On average, the gauge can signal a rebound in hiring as little as three months before the fact and can predict job declines six to nine months in advance, the Conference Board said.
An increase in the number of consumers saying jobs were hard to get in July, and declines in the number of companies with openings and in those saying available positions were difficult to fill contributed to the drop in the index.
The Labor Department’s payrolls report, released on Aug. 5 also showed private employers added 154,000 workers last month, more than the median estimate in the Bloomberg News survey.
Consumer spending dropped in June for the first time in almost two years as a hiring slowdown caused consumers to retrench. Purchases fell 0.2 percent last month after a 0.1 percent gain the prior month, Commerce Department figures showed last week.
Slowing sales is one of the reasons San Jose, California- based Cisco Systems Inc., the largest networking-equipment maker, announced last month it plans to eliminate about 6,500 jobs. Goldman Sachs Group Inc. also announced it will cut about 1,000 jobs.
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