The Conference Board’s Employment Trends Index declined in June to a reading of 114.31 from a downwardly revised reading of 115.53 in May, indicating slower job growth in the coming months. It also noted the decline in temp jobs — ongoing since November — portends losses in other industries in addition to slower job gains.

“The [Employment Trends Index] fell for the second consecutive month in June, signaling slower job growth in the coming months,” said Selcuk Eren, senior economist at The Conference Board. “While the index has been on a declining trend since March 2022, it remains quite elevated in a historical context. This suggests the US will continue adding jobs, just at a slower rate. We will need to see further declines in the ETI before predicting if — and when — employment growth will turn negative.”

Eren noted the job market remains very tight, especially compared to pre-pandemic conditions.

“While signs of cooling have emerged, they’re proceeding at a very slow pace. Among the components of the ETI, job openings have been trending downwards since the highs reached a year ago but remain well above pre-pandemic levels,” he said. “The number of employees working in temporary help services has been falling since November 2022. As an important early indicator for hiring, this previews slower job gains and eventually job losses in other industries.”

The Conference Board expects the Fed’s rate hikes to have a more visible negative impact on job growth by the end of 2023 and into the first half of 2024, according to Eren. In addition, by the middle of next year, the organization forecasts the unemployment rate to peak at around 4.5% and labor force participation to fall to 62.1%, compared to current levels of 3.6% and 62.6%, respectively.

June’s decrease in the Employment Trends Index was driven by negative contributions from five of its eight components: ratio of involuntarily part-time to all part-time workers, initial claims for unemployment insurance, percentage of firms with positions not able to fill right now, number of employees hired by the temporary help industry and industrial production.