The Conference Board’s Employment Trends Index edged down in May to a reading of 116.15, down from an upwardly revised reading of 116.79 in April. The labor market is cooling only in certain, select industries such as information.

“The Employment Trends Index declined slightly in May and has been on a slowly declining trend since reaching its peak in March 2022,” said Selcuk Eren, senior economist at The Conference Board. “The index remains quite elevated, so job gains are likely to continue over the next few months, but at a slower rate.”

Eren noted job losses are concentrated within a few sectors while the economy continues to generate employment opportunities in industries grappling with labor shortages.

“Overall, we remain in a very tight labor market, especially compared to prepandemic conditions. Job growth continues economywide, with in-person service sectors leading the way,” Eren said. “Industries that have yet to fully recover from the pandemic — including leisure and hospitality, along with the government sector — are poised to continue adding jobs, while an aging US population will fuel sustained employment growth in the healthcare and social assistance industry.”

For now, the labor market is cooling only in select industries, most notably the information sector, which includes most tech companies, according to Eren. However, weakness is becoming visible across other labor indicators, including a decline in voluntary quits and a surge in layoff announcements over the first five months of 2023.

The Conference Board expects the Federal Reserve to raise interest rates at least once more by 25 basis points to slow wage growth and reduce inflationary pressures.

May’s decrease in the Employment Trends Index was driven by negative contributions from five of its eight components: percentage of respondents who say they find “jobs hard to get,” real manufacturing and trade sales, percentage of firms with positions not able to fill right now, job openings and industrial production.