Jobs Numbers Weak, Expected to Fall More

Monday, June 9, 2008 10:20 AM

NEW YORK (Reuters) - The U.S. labor market declined in May to the weakest in three and a half years and is likely to deteriorate further, the Conference Board said on Monday as it launched a new leading indicator for employment.

The Conference Board said its Employment Trends Index fell in May to 113.7 from 114.3 in April, for the lowest since 113.5 in December 2004. The index is down 6 percent since July 2007, it said. The index's all-time peak was 126.5 in July 2000.

The Conference Board said the Employment Trends Index peaked in this cycle in summer 2007, foreshadowing job losses that began in January, and saw no signs of a turnaround yet.

"We forecast further softening in the labor market, a moderate rise in unemployment, and weaker wage growth over the next several quarters," said Gad Levanon, senior economist at the Conference Board, a private research group.

"Employers will find it easier to recruit and hire, and will be looking at slower growth in compensation costs. Workers will find it harder to get a job, a raise or a bonus - all of which will further rein in consumer spending."

However, the Conference Board said it did not anticipate job losses on the scale of those seen in previous downturns because employers have kept their payrolls leaner.

The Conference Board will publish the Employment Trends Index monthly on the Monday that follows each Friday release of the U.S. Bureau of Labor Statistics monthly jobs report.

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