US employment trends for May 107.01 versus 107.88 the last month (revised from 105.77)

Key Takeaways from the Conference Board Employment Trends Index (ETI) – May 2026

• Employment Trends Index (ETI) fell to 107.01 in May from an upwardly revised 107.88 in April, signaling some moderation in the labor market outlook.
• The ETI is a leading indicator for payroll employment, meaning it is designed to provide clues about future hiring trends rather than current employment conditions.
• Despite the monthly decline, the ETI remains 2.1 points higher than six months ago, suggesting the labor market continues to show overall resilience.
• May payrolls increased by 172,000 jobs, indicating current labor market conditions remain solid even as forward-looking indicators soften.
• Five of the eight ETI components contributed negatively in May, highlighting potential downside risks for employment growth in coming months.

Major Negative Factors

• The largest drag came from the share of small businesses reporting positions that are “not able to be filled right now.”
  • Fell to 29% from 34% in April.
  • Lowest level since May 2020.
  • Suggests labor shortages are easing and hiring demand may be cooling.
• Job Openings (JOLTS) increased sharply above 7.6 million, but the Conference Board noted the gain was largely driven by an unusual increase in the professional and business services sector and may not be sustained.
• Initial unemployment claims rose to 214,800 in May, up from exceptionally low levels in April, although claims remain below year-ago levels.
• Real manufacturing and trade sales were little changed and made a small negative contribution.
• Industrial production also showed little change and contributed modestly to the decline.

Positive Factors

• The share of involuntary part-time workers fell to 17.4% from 17.9%, indicating fewer workers are being forced into part-time employment.
• The percentage of consumers saying “jobs are hard to get” declined to 18.6% from 19.4%, marking the second consecutive monthly improvement.
• Temporary-help employment increased again, extending a positive trend that has been in place throughout 2026, although the contribution was smaller than in previous months.

Market/Economic Interpretation

• The report suggests the labor market remains healthy but is showing early signs of cooling.
• Current hiring remains strong, but forward-looking indicators are becoming more mixed, with businesses reporting fewer hard-to-fill positions and unemployment claims edging higher.
• The Conference Board’s message is essentially that the labor market is not weakening significantly, but the pace of employment growth may slow from current levels over the next several months.

ETI Component Summary

Negative Contributors

• Positions Not Able to Fill Right Now
• Job Openings
• Initial Jobless Claims
• Real Manufacturing & Trade Sales
• Industrial Production

Positive Contributors

• Involuntary Part-Time Workers Ratio
• Consumers Saying “Jobs Are Hard to Get”
• Temporary Help Employment

Bottom Line: The ETI points to a labor market that remains resilient but is losing some momentum beneath the surface. The strong May payroll gain contrasts with a softer forward-looking outlook, suggesting employment growth could moderate later in 2026.

This article was written by Greg Michalowski at investinglive.com.