The Conference Board is showing a rather different picture from what the U.S. Labor Department showed with the unemployment rate almost magically dropping to 7.8% in September from 8.1% in August. Today’s Employment Trends Index from the Conference Board fell again in September and it also showed a downward revision to the month of August.

Today’s reading for the September Employment Trends Index fell to 107.86, versus a revised figure of 108.23 in August. The good news is that this is at least 5.4% higher than a year ago.

September turned out to be the third decline in four months and this suggests that employment growth will get weaker in the fourth quarter. Its director of research said, “The U.S. economy entered a soft patch in the spring and the result has been lackluster job growth, which is likely to continue through the first half of 2013.”

So, what drove it lower? Negative contributions were seen from five of the eight components, with the leading issue being the ratio of involuntarily part-time to all part-time workers. Other issues were listed as the following:

• Percentage of firms with positions not able to fill right now
• Initial claims for unemployment insurance
• Number of temporary employees
• Job openings

Last Friday’s unemployment rate drop was challenged by many market pundits and many refuse to even accept the number as reality. The Conference Board takes many formal reports into its calculation for the Employment Trends Index, and today’s report only challenges the Labor Department Employment Situation release for September that much more. The warning for the rest of the year and the first half of 2013 sort of speaks for itself.

JON C. OGG

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