By Xavier Fontdegloria


An index which gauges employment trends in the U.S. declined in December for third straight month, suggesting job gains are likely to moderate further.

The Conference Board said Monday that its Employment Trends Index decreased to 116.31 in December from a revised 117.14 in November.

The decline in the index suggests that a further deceleration in job growth is likely in the coming months, said Frank Steemers, senior economist at The Conference Board.

The Employment Trends Index is a leading composite index for employment which aggregates eight indicators. When the index increases, employment is likely to increase as well, while turning points in the index suggest a change in the number of jobs is likely occur in the short-term.

Despite the recent falls, the indicator remains at an elevated level and would need to decline further before it may signal a turning point in the job market, Mr. Steemers said.

The indicator is published after the U.S. Labor Department's employment report on Friday showed U.S. employers added 223,000 jobs in December, down from the 256,000 jobs created in November.

Seven of the eight components which form the index declined in December: Initial claims for unemployment, percentage of firms with positions not able to fill right now, ratio of involuntarily part-time to all part-time workers, number of employees hired by the temporary-help industry, industrial production, real manufacturing and trade sales, and job openings.

The labor market remains tight as job openings and voluntary quits are elevated and layoffs remain low, Mr. Steemers said. However, some leading indicators for hiring may foreshadow weaker job gains or even job losses in some industries, he said.

"Looking ahead, we expect the Federal Reserve's rapid interest rate hikes to have a more visible, negative impact on the economy and job growth as 2023 proceeds," he said.

The Conference Board expects the unemployment rate to rise to about 4.5% by year-end from December's 3.5%.


Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com


(END) Dow Jones Newswires

01-09-23 1034ET