“There is a job paradox happening in the US, it is a challenge that is weighing on a quicker pace of recovery.”--Paul Ebeling
As the US job market comes roaring back, there is a growing concern about whether there are enough workers to power faster economic growth.
Economists and policy makers are unclear about what is really causing this gap and how long it will last. Hiring remains strong for now, indicating these labor disparities are not a real problem. But if labor shortages do persist especially in the leisure and hospitality industry that could slow demand and lead to price increases.
Friday’s employment report, which is projected to show the economy added about 1-M jobs in April, will give us new insight into this mismatch and whether it’s deterring growth.
While the unemployment rate likely fell to 5.8% last month, according the median estimate of surveyed economists, the labor force participation rate remains well below pre-VirusCasedemic marks.
And, the employment to population ratio, which measures the share of the population that is employed is more than 3% below where it was before the Covid-19 attack
Lingering health concerns, ongoing child care responsibilities are some of the reasons Americans are reluctant to return to work. Some are also retiring early.
Plus, anyone who previously made $32,000/yr or less is better off financially in the near term receiving unemployment benefits, according to economists at Bank of America.
Filling vacancies remains a widespread challenge, especially for low-wage and hourly workers, and many firms have had to increase pay or offer signing bonuses to attract applicants, according to the Fed’s latest Beige Book.
“Mr. Biden needs to take a course in our tax hike history – tax hikes just don’t work in a reviving economy! His focus should be on reshuffling the current government expenditures to get a better effect for employment. Too much pork barrel legislation occupies his absence of priorities list and more prudency is needed as we do in business!
“Biden is also destroying the incentive to go back to work with all of his unemployment benefits. He should incentivize people to go back to work. An immigration open door policy doesn’t work either plus encouraging larger families on social welfare with his increased child allowances. He wants more budgetary capability, then, these are several areas he might prudently explore.
“Further, address the homeless insanity too for building homes for them and teaching them new skills plus removing their depression attitudes are also a most needed focus area. In business, we reward people for creative thinking. How about applying that to coming up with new ideas, as the last Administration did for we are Nation built on entrepreneurial spirt, something he has altogether forgotten about,” says LTN contributor and businessman Bruce WD Barren.
Wednesday, the benchmark US stock market indexes finished at: DJIA +97.31 at 34230.34, NAS Comp -51.08 to 13582.46, S&P 500 +2.93 at 4167.59. The Russell 2000 lost 0.3%.
Volume: Trade on the NYSE came in at 929-M/shares exchanged
DJIA closed at record high in another rotation day.
- Russell 2000 +13.5% YTD
- DJIA +11.8% YTD
- S&P 500 +11.0% YTD
- NAS Comp +5.4% YTD
HeffX-LTN’s overall technical outlook of the major US stock market indexes is Bullish to Very Bullish in here.
Looking Ahead: Investors will receive the weekly Initial and Continuing Claims report and preliminary Productivity and Unit Labor Costs for Q-1 Thursday.
Have a healthy day, Keep the Faith!