The Conference Board’s Employment Trends Index ticked down in January, retreating from an increase registered in December. The index now stands at 109.56, down from 110.96 one month earlier but it still represents a 3.4 percent gain over the past 12 months. However, with the government shutdown affecting some of the data The Conference Board uses to calculate the index, it cautions that this month’s figure may not be entirely accurate.

The Bureau of Labor Statistics has also released its data for January, reporting that the economy added 304,000 jobs in the month. Gad Levanon, chief economist, North America, at The Conference Board, says, “While financial markets and business confidence measures were moving south in recent months, employers kept adding workers at a fast rate, specifically 304,000 new jobs in January. If anything, employment growth has accelerated in recent months…We still expect job growth to moderate during 2019, but perhaps more gradually than we projected a month ago. With the ongoing massive retirement of baby boomers, employment growth is almost certain to be fast enough to continue tightening the labor market and drawing more people to the labor force. Labor force participation for the working age population has been growing rapidly in recent months, a trend that is likely to continue, limiting the tightening of the labor market moving forward.”

In determining its Employment Trends Index, the Conference Board aggregates eight labor market indicators that it has found are accurate within their own areas. It notes that aggregated individual indicators into a composite index filters out “noise” to show underlying trends more clearly. January’s decrease was fueled by negative contributions from seven of the eight components. From the largest negative contributor to the smallest, these were: the ratio of involuntarily part time to all part-time workers, the percentage of firms with positions not able to fill right now, percentage of respondents who say they find “jobs hard to get,” initial claims for unemployment insurance, job openings, real manufacturing and trade sales, and industrial production. The indicator not factoring into this month’s decrease was the number of employees hired by the temporary help industry from the Bureau of Labor Statistics.

“Due to the government shutdown, some of the components in this month’s Employment Trends Index release were unavailable or biased. Therefore, we encourage users to take this month’s decline with some caution,” he adds. “However, we can still conclude that the index has experienced some softening since the summer, suggesting that job growth will slow down in 2019. Overall economic activity rapidly grew through the end of 2018, suggesting that employment growth will remain solid in early 2019, but as the economy slows down, job growth will also slow down later in the year. A slowdown in job growth is not unexpected in an economy that has expanded for this long and reached such a low unemployment rate.”