The Conference Board’s Employment Trends Index rose sharply in October and points to strong employment growth in the months ahead. On the other hand, it also indicates labor shortages and rising wages likely won’t go away.

“As the negative economic impact of the Delta variant subsides, spending on — and employment in — in-person services should continue to recover toward pre-pandemic levels,” said Gad Levanon, head of The Conference Board Labor Markets Institute.

The Conference Board projects the US unemployment rate will continue to recover toward pre-pandemic levels and may reach the pre-pandemic low of 3.5% by the end of 2022.

“In other words, labor shortages may not go away,” Levanon said. “In such an environment, significant upward pressure on wages may become the new normal.”

The Conference Board’s Employment Trends Index was at a reading of 112.23 in October, up from 109.68 in September.