No matter how hard it tries, the Fed hasn’t been able to slow hiring in the hopes that it will bring down inflation—because corporations have record profits and are only beginning to lay off workers.
But watch out this year as the $trillions in New Deal spending of bipartisan bills just passed is funding projects that need good jobs, such as the Infrastructure and Inflation Reduction Acts.
So what is the Fed to do, discourage the long overdue modernization of the American economy?
The Bureau of Labor Statistics JOLTS report showed 10.5 million job openings and was “little changed” from past months.The above graph shows job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.
“The number of job openings was little changed at 10.5 million on the last business day of November, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 6.1 million and 5.9 million, respectively. Within separations, quits (4.2 million) and layoffs and discharges (1.4 million) changed little.”
That means approximately 400,000 jobs were created in November—the difference between hires and total separations.
And here’s a graph once again of corporate profits that fell to their lows in the 1980s before soaring to new heights.
So this Friday’s unemployment report will be closely watched by Fed officials, with few giving any indication that they want to slow down their rate increases.
Minutes released Wednesday from the Fed’s Dec. 13-14 meeting showed the central bank’s policymaking arm recognizes that inflation has begun to cool somewhat but its participants still view price growth as “unacceptably high”.
Wow, this is while the overall picture is of a slowing economy, with the ISM’s manufacturing survey showing contraction. U.S. manufacturing activity slipped to 48.4 in December from 49 in the prior month, according to the Institute for Supply Management on Wednesday. This is the lowest level since May 2020.
And job layoffs have increased sharply before the holidays. The worker-friendly Guardian was not slow to react.
“After corporations complained of labor shortages through 2021 and 2022, several companies have shed workers in mass layoffs as 2022 comes to a close. Job cuts in the US have risen this year, with a 6% increase for the first 11 months of 2022 in comparison to last year.”
Consumers are already cutting back spending as retail inventories pile up and more stores begin to discount. That will become more serious now that the holidays are over. It would be nice if there was more consistency in federal policies!
So my answer is the job market is not too hot. Many more jobs will be needed to aid our economic recovery as well as modernize those regions that have fallen behind at a time when we need all Americans to participate in the recovery.
Harlan Green © 2022
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
No comments:
Post a Comment