The Conference Board reports that its Employment Trends Index increased in January, now standing at 128.93, up from 128.71 in December. This represents a 1.9 percent increase compared to a year ago. For January, the U.S. Bureau of Labor Statistics reported 151,000 jobs created, compared to a 262,000-job gain in December.

“The Employment Trends Index rose for the second month in a row, reducing the likelihood of further slowing in employment growth,” says Gad Levanon, managing director of macroeconomic and labor market research at The Conference Board. “However, the temporary help industry component declined sharply in January, and because it is one of the best leading indicators of employment growth, we will monitor it closely in the coming months.”

Regarding the Bureau of Labor Statistics figures, Levanon says, “While employment growth came in a little below expectations, the main takeaway from this jobs report is more relief than disappointment. Overall, the message from the labor market is more positive than the one from the GDP numbers, partly reflecting ongoing weak productivity growth. Part of the slowdown in job growth in January is a bounce back from the blistering pace of job creation in the fourth quarter, which was clearly above trend. The trend of job growth is likely to lead to solid household spending moving forward.

“The labor market continues to tighten with the unemployment rate declining to 4.9 percent on its way to 4.5 percent by year’s end. And this report provides more evidence of wage acceleration, with year-over-year growth in average hourly earnings reaching 2.5 percent.”

The Conference Board’s index aggregates eight labor market indicators into a composite index to filter out “noise” to show trends more clearly. January’s result was driven by positive contributions from five of the eight components. In order from the largest positive contributor to the smallest, these were: the Percentage of Respondents Who Say They Find “Jobs Hard to Get,” Industrial Production, Real Manufacturing and Trade Sales, Percentage of Firms With Positions Not Able to Fill Right Now, and the Ratio of Involuntarily Part-time to All Part-time Workers.

Other labor market indicators aggregated into the index include data on initial claims for unemployment insurance from the U.S. Department of Labor, and from the U.S. Bureau of Labor Statistics, the number of employees hired by the temporary-help industry and job openings figures.