Worker Shortage & Market Nervousness
Do you ever turn off your alarm and lay there in bed and think, “I really don’t want to go to work today?” Well, it looks like a lot of Americans are following through on that idea.
The Labor Department issued its latest Job Openings and Labor Turnover report (JOLTS) which showed that U.S. job openings went up 0.2% to 9.2 million to set another record in May. New employee hires fell 1.4% to 5.9 million because of a shortage of hirable applicants. Some analysts think this is partly due to a mismatch of the unemployed skill level and the skill level needed by the hiring companies. One positive note from the report is that employees quitting their jobs in May dropped to 2.5% from 2.8% in April which shows strong worker confidence.
An interesting side note is that the number of people receiving unemployment benefits is falling faster in Missouri and the other 21 states who canceled the federal enhanced unemployment benefits. This suggests that ending the federal aid might be pushing more people to apply for a job. The U.S. Labor Department showed that Missouri’s May unemployment rate was 4.2% which was significantly lower than the national average of 5.8% according to Eric Morath and Joe Barrett of The Wall Street Journal.
On the stock market front, the major indexes are beginning to show some weakness after setting record highs. It seems investors are trying to decide whether they should stay with riskier bets or begin moving into less risky value stocks as a defensive stance because of soft economic data and concerns about rising COVID cases. If the rising COVID cases cause Americans to slow down their buying it could lead to more market indecision and possible volatility in the coming weeks.
Overall economic conditions are improving, but we have some serious risks to work through. A key to the second half of this year for the market is how the country handles this latest uptick in COVID and how quickly the rest of American gets back to work. The employment situation is better than it was a year ago, but we are far from full strength.
I believe the American worker is the best in the world. No one likes getting up with an alarm clock, but I believe Americans are starting to go back to work and that’s great for our country.
Have a blessed week!
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