The JOLTs report was released this morning. JOLTs stands for Job Openings and Labor Turnover survey. It is put together by the US Bureau of Labor Statistics. The mainstream media has covered the big points well.
Total job openings did fall from the previous month. In fact, this is the first time job openings are lower since they dipped in December of 2020. Something to keep in mind is that last month set a record in the amount of job openings. Employers are still searching for over 10 million employees.
There are help wanted signs plastered everywhere. Employers are continuing to give bonuses to come to work. I’ve even seen some hand out cash just to come interview. There is a local manufacturer that is offering a $2k bonus to come work for them. No degree or experience necessary. You start with $1k on day one at $20/hr and get another $1k at your 6 month mark with a $2.50/hr bump in pay. That is over $45k/year for a job that doesn’t even require a high school diploma!
The last unemployment report showed over 4 million on the unemployment dole.
10M+ job openings minus 4M+ on unemployment equals a deficit of 6 million people. The JOLTs report is from the end of August and the unemployment report is from last week, so our reports don’t line up exactly but this is still a sizable difference. It will be something to watch closely as it could lead to a big labor crunch. Employers are desperate to attract workers. The wage rate is being bid higher by companies looking to hire. This will put more money in the hands of consumers.
The other big story from the JOLTs report is the quit rate.
Americans are quitting their current jobs at record numbers. The current quit rate is 2.9%. This is up .2% from July’s rate. On a year-over-year basis, the quit rate is 38% higher. I think there are three things in play that are being reflected in the quit rate.
As the great kaleidoscope turns, Americans have decided to move out of the big cities. Some employers are allowing ‘work-from-home’ situations but some are not. Employees are now in the driver seat and can dictate how they wish to work. People are also moving across state lines. The blue states of California, Illinois, New York, are all seeing large numbers of people moving away. States like Idaho, Utah, and Florida are picking up a lot of these people. Arizona has also seen their housing market catch fire. People are searching for greener pastures and with that new jobs.
There have been many advertisements for businesses looking for people. I believe many are seeing an opportunity to find a new job either because they are looking for a better pay rate or to find a new career that they think they would enjoy pursuing. Either way, this can cause the quit rate to run high.
Vaccine mandates are a deal breaker for many. We are seeing this play out all over the country with; police and firefighters, nurses and medical staff, airline pilots and air traffic controllers. The mainstream media has been slow to report on this story but there is a ground swell of people that are feeling that these vaccine mandates have pushed too far. They want medical freedom and they aren’t afraid to put their foot down to their employer.
I reported back at the beginning of September that October and November would be real hot months for inflation and the stock market. I had two caveats. One was a resurgence of the coronavirus. The second was that the Biden administration would need to not shoot itself in the foot.
On the coronavirus front, we are seeing the case rate, hospitalization rate, and death rate all dropping.
This data comes from the New York Times.
We might not have heard the last of the virus just yet. It has been slowly moving north.
However all signs point towards the virus no longer being a strain on the economy. The threat of another shutdown is becoming less of a reality.
The second caveat, however, is proving itself impossible to ignore. The Biden administration has announced a vaccine mandate but have made no concrete steps towards writing an OSHA rule or providing an enforcement mechanism. They are also looking at 24 of the 50 states suing them over the rule as soon as it is written. This mandate seems to be a big bluff. It has provided cover for some employers to enforce their own vaccine mandates but we are seeing some serious push back. My sympathies to anyone that was thinking they were going to fly somewhere in the next 3 months. Or watch Kyrie Irving play basketball. Or visit a hospital. Or ride a ferry.
In addition to the fake vaccine mandate, the administration is struggling to keep it together in Congress. The democrats required the republican’s help to raise the debt ceiling. Biden’s budget, infrastructure bill, and other spending plans seem to be gaining no traction. The left is unable to get their act together and compromise to pass legislation. The far-left has decided they won’t budge on spending a massive amount of money. The moderates have had enough of the far-left’s bullying tactics and are now standing firm. Republicans are happy to sit tight and watch the left waste their opportunity to pass any bills. All the while, Biden and his administration seem unable or unwilling to bring the far-left to heel. There is an opportunity to pass some bills but the moderates need to feel their concerns are heard. Normally I would be overjoyed to hear of such gridlock in DC. However the country is in an undesirable situation. We have these massive spending bills and this vaccine mandate hanging over the economy like the sword of Damocles. It is causing many to face the reality that stagflation is coming and they are beginning to get into position for it.