SHRM Index Shows August Cooling of Job Growth

August 23, 2005 ( - A monthly manufacturing employment index was a mixed bag this month with word the labor market may be tightening amid a slowing of employment growth.

That was the bottom line of the latest data from the Leading Indicator of National Employment (LINE), in a news release from the Society for Human Resource Management (SHRM) and the Rutgers University School of Management and Labor Relations.

The LINE data showed the index at 60.6, down slightly from July’s 61.8 aggregate showing and 62.9 in August 2004. An index value above 50 indicates manufacturing employment is growing, while an index below 50 shows that employment is contracting.

Good news for workers was that some employers were starting to bump up initial compensation packages because of difficulty in attracting key talent, according to the SHRM data. The recruiting difficulty index – which tracks efforts by manufacturers to recruit highly qualified individuals to fill the positions most critical to a firm’s success – is at its highest level in the 19 months LINE data have been recorded, according to the news release. The recruiting difficulty index came in at 63 for August, up notably over the 60.7 in July and the 58.3 a year ago.

According to SHRM, currently there is no indication of widespread wage inflation, but if the job market continues to tighten, there will be greater pressures on manufacturers to raise wages. The survey details are here .