Popular Economics Weekly
The number of job openings reached a series high of 7.3 million on the last business day of December, the U.S. Bureau of Labor Statistics reported yesterday. Over the month, hires and separations were little changed at 5.9 million and 5.5 million, respectively.
This means more job creation this year, even with January’s 304,000 new payroll jobs in the BLS unemployment report. The gap between openings and hires is now 1.428 million, a new record and up from 1.304 million in November. It’s a very good number for growth prospects in 2019, as employers don’t look for this many new employees, unless they see a sunny future.
And the gap is likewise high between openings and those who were actively looking for work, at 1.041 million and next only in the record book to November's 1.098 million.
Year-on-year comparisons further underscore the yawing gap with openings up 29.4 percent vs only a 7.1 percent gain for hires. Given how difficult it is for employees to fill openings, the number of layoffs & discharges in the month fell 3.2 percent to 1.697 million.
And the number of employees who quit rose 1.0 percent to 3.482 million in what hints at worker mobility and the pull from higher paying rivals. This is the reason workers’ pay is also rising faster—with real, after tax wages up 2 percent.
There was a slide in business optimism that is temporary, in my opinion, since the NFIB Small Business Optimism Index slipped 3.2 points in January; as owners continued hiring and investing, but expressed rising concern about future economic growth. The 101.2 reading, the lowest since the weeks leading up to the 2016 elections, however remains well above the historical average of 98, but indicates uncertainty among small business owners due to the 35-day government shutdown and financial market instability. The NFIB Uncertainty Index rose seven points to 86, the fifth highest reading in the survey’s 45-year history.
“Business operations are still very strong, but small business owners’ expectations about the future are shaky,” said NFIB President and CEO Juanita D. Duggan. “One thing small businesses make clear to us is their dislike for uncertainty, and while they are continuing to create jobs and increase compensation at a frenetic pace, the political climate is affecting how they view the future.”Another ‘blip’ that could be temporary was the fall in December retail sales, down 1.2 percent. But that may also be due to the December ‘uncertainties’—a lousy stock market, lousy weather, and the record government shutdown. Republicans got the message, which is why the “no wall” budget compromise just voted on will pass White House muster this time with no government shutdown.
Another reason for optimism this year is less than 2 percent inflation in both the wholesale and retail sectors should keep consumers buying. Wholesale producer prices in the Producer Price Index were pulled down by a 3.8 percent drop in energy that follows 4.3 and 5.1 percent monthly declines in December in November, the latter the month when oil collapsed from $70 to $50.
And happy consumers amid lots of available jobs means they also see a sunny economic future and will act accordingly.
Harlan Green © 2019
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