Is the labor market strengthening? Despite a slowdown in the
economic growth, job openings in the United States surged. According to the
article, the number of Americans voluntarily quitting work hit a nine-year
high. Job openings, a measure of labor demand, increased by 261,000 in December
in the monthly job openings and labor turnover survey conducted by the Labor
Department. This was the second-highest reading since the series started in
2001.These numbers point to a tightening of the labor market.
This data eases the concerns of those who were worried about
the health of the economy after a recent drop in small business confidence in
January, and a continuing decline in wholesale inventories.
The increase in job separation lifted the jobs opening rate
to 3.8% from 3.6% in November. The hiring rate remained unchanged, though,
indicating that employers were struggling to hire qualified applicants for
their open positions. Small businesses are being prompted to raise their wages
in order to attract and retain workers. In response, the share of small
businesses raising compensation increased to its highest level since 2007.
The combination of more job openings and more people
quitting could result in pay increases. Wage growth was shown to increase in
January significantly. Economists say that wages need to grow by around 3% in order
to attain the Fed’s target of 2% inflation.
Link: http://www.nytimes.com/2016/02/10/business/economy/job-openings-surged-in-december.html?ref=economy&_r=0
I think what I find most interesting about this is the fact of how many people are voluntarily quitting work, and it makes me question why this is happening? I wonder if this has to do with an increased confidence in people's financial ability to retire with a much stronger and stable market than there has been in the past several years.
ReplyDeleteAn increase in job openings seems promising, but it is only positive if employers can find qualified employees. Training or education need to be revamped in order to cultivate a working force who is ready to enter the open jobs in the market.
ReplyDeleteThis article is very interesting. This tells me that people are very confident in the current state of the labor market, and the economy as a whole. Why else would that many people voluntarily quit? I'm kind of surprised that there is such confidence though... The start of this year has not gone well as markets are performing horribly, and several international economies are struggling.
ReplyDeleteWill this actually be helpful in the long run? Yet it is important to consider the impact of the job openings vs business confidence in the overall economy. The trade off between those quitting and a pay increase will also have an important impact on the economy as well.
ReplyDelete