Several headlines last Friday screamed 4.4 Million Workers Quit Their Jobs, as if that was the most important takeaway from the Labor Department’s October JOLTS report.
But there were also 6.5 million hires (dark blue line in graph) and 10.4 million mostly voluntary separations (yellow line).
In fact, many of those quitting were shifting to better jobs, not leaving the workforce. Quits were up 34 percent year-over-year to a new record high. These are voluntary separations that generally mean they are finding better jobs. (see light blue columns for "quits").
Another indication job formation is heading in the right direction is that 4th Quarter GDP growth predictions are between 6 to 8 percent, as we continue to recover from the pandemic, up from the Q3 growth slowdown to 2 percent.
This is huge and predicates many more job hires as producers race to stock their shelves in the face of shortages. They had better stock up soon, as consumers are buying like never before. Retail and trade sales surged 1.7 percent last month, the government said, and are up 16.3 percent YoY.
That’s the biggest gain since the government last doled out billions of dollars in stimulus money to families with the American Rescue Plan in March that kept many families and businesses solvent. It delivered $1400 to millions of American families, extended enhanced unemployment benefits and boosted funding to ramp up vaccine distribution and reopen schools.
Retail sales rose 4 percent last month at internet retailers, 3.8 percent at electronics and appliance stores and 2.2 percent at department stores to lead the way in October, all strong numbers. Sales also climbed 1.8 percent at auto dealers, but partly because of record prices. Automakers can’t make enough cars to satisfy demand due to a global parts shortage.
If autos and gas are set aside, U.S. retail sales rose a smaller 1.4 percent last month. Those two categories often exaggerate ups and downs in consumer spending and aren’t always good indicators of how much households are willing to spend.
Nor is it a reliable indicator of inflation, as retail sales are not inflation-adjusted. Consumers are pushing up prices because they have so much money to spend, and the supply bottlenecks won’t subside until next year; after the holidays when consumers traditionally become stingier and demand diminishes.
Inflation is actually a good sign at the moment, because we like to spend during good times and scrimp during a recession, or the expectation of one. So now isn’t the time to fret about inflation.
Another pandemic surge is much more worrisome, as infection rates are declining more slowly at the start of cold weather when Americans go indoors, which is a real reason to worry about what may happen next year.
“The current 7-day moving average of daily new cases (70,431) decreased 1.4% compared with the previous 7-day moving average (71,450). A total of 46,180,190 COVID-19 cases have been reported as of November 3, 2021.”
So the best holiday wish for this week is that we all stay as healthy and wealthy as possible!
Harlan Green © 2021
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