The Conference Board Employment Trends Index (ETI), a leading indicator of payroll growth, fell to 107.01 in May from an upwardly revised 107.88 in April, suggesting some downside risks for the labor market despite another strong monthly payrolls report.

• Five of the index's eight components contributed negatively. The largest drag came from the share of small firms reporting positions they cannot fill, which fell to 29% from 34%, the lowest reading since May 2020.
• Job openings also weighed on the index. While JOLTS openings rose above 7.6 mil in April, The Conference Board noted that the increase was concentrated in professional and business services and may not be sustained.
• Initial jobless claims increased to 214.8k in May, while industrial production and real manufacturing and trade sales were little changed and also detracted modestly from the index.
• On the positive side, labor market quality indicators improved. The share of involuntary part-time workers fell to 17.4% from 17.9%, the share of consumers saying jobs are hard to get declined to 18.6% from 19.4%, and temporary-help employment continued to rise.
• While the monthly decline points to some moderation ahead, the ETI remains +2.1 points above its level six months ago, suggesting the broader labor market continues to show resilience despite signs of gradual cooling.