The Conference Board’s Employment Trends Index declined in November to a reading of 117.65, down from October’s downwardly revised reading of 118.74, indicating slower job growth in the coming months.

“The Employment Trends Index decreased in November 2022 for the second consecutive month. While the index remains at a high level, its downward trend signals slower job growth ahead,” said Frank Steemers, senior economist at The Conference Board. “The labor market is currently still robust. However, the fourth consecutive decline in the number of temporary help services jobs — a component of the ETI and an important leading indicator for hiring — is a warning sign that job growth may slow going into 2023.”

Yet, Steemers also noted the demand for workers remains resilient and wage growth continues to be elevated.

“With the number of employees quitting still high — and the labor supply still constrained — employers may continue to offer strong pay increases to their existing workers and new hires over the coming months,” he said. “However, with the economy expected to slow further in 2023 amid the Federal Reserve’s rapid interest rate hikes, we expect the US labor market to cool and possibly even record some monthly job losses.”

Still, labor shortages are unlikely to disappear altogether, with the unemployment rate projected to rise from the current 3.7% to a still-low 4.5% in 2023, Steemers said. Employers may still need to manage recruitment and retention difficulties, as well as rising labor costs, into the new year and beyond.