The Conference Board Employment Trends Index fell in February to a reading of 112.29 from a downwardly revised reading of 113.18 in January. The organization expects job growth to slow down in the coming months.

“The Employment Trends Index decreased in February after two consecutive months of modest increases,” Will Baltrus, associate economist at The Conference Board, said in a press statement. “The ETI has been trending downward since hitting a peak in March 2022. While the index is still elevated compared to its prepandemic level and the economy has continued to add jobs through February 2024, the labor market is likely to cool off, with modest job gains expected through Q3 and Q4 of 2024.”

Baltrus noted that February’s payroll gains were again concentrated in healthcare and social assistance, leisure and hospitality, and government — accounting for 73% of jobs added.

“Apart from these sectors, job growth broadened for the third straight month, with modest growth in construction, retail trade and transportation and warehousing,” Baltrus said. “However, other labor market gauges were weaker in the month. The unemployment rate rose in February to 3.9%, but increases were concentrated among younger workers, especially those aged 16 to 24.”

“This is reflected in initial claims for unemployment insurance, which rose for the second consecutive month,” he continued. “Temporary help services — an early indicator for hiring in other industries and a component of the ETI — lost jobs in February, continuing the declines observed since April 2022.”

The Conference Board expects slower real GDP growth in the second and third quarters, which may dampen demand but not extensively given ongoing labor supply issues linked to labor shortages in key sectors, according to Baltrus.

February’s decrease in the Employment Trends Index was driven by negative contributions from four of its eight components: percentage of respondents who say they find “jobs hard to get,” percentage of firms with positions not able to be filled right now, number of employees hired by the temporary-help industry, and initial claims for unemployment insurance.