Labor shortages are starting to weigh on businesses in many industries across the U.S., as this week’s Kiplinger Letter documents. (Click here to get the first page of this week’s Letter.) A recent survey of small businesses found that 30% of them have had to increase pay during the last three to six months to find or retain enough workers. That’s the highest level since 2001. About half of small businesses say they can’t get enough qualified job applicants. And the shortages span the pay scale across different industries: Everyone from carpenters to cooks to computer programmers.
One business that is no stranger to the problem: Trucking. Fleet owners have been grappling with a dearth of qualified, licensed truck drivers for years. Veteran drivers are reaching retirement age without enough young recruits joining the industry to take their places. That forces fleets to pony up higher salaries, bigger bonuses and richer benefits to attract or retain drivers. And since labor is the industry’s biggest cost, the competition for drivers points to rising freight rates for shippers this year. Continue reading “A Shortage of Truckers Will Drive Up Freight Rates”
The days of job gains of 200,000 or more per month are likely in the past as the labor market continues to tighten and employers struggle to find qualified workers. Instead, expect a gain of 170,000 jobs to be reported for September. Despite the modest number, this is still likely to cause a slight drop in the unemployment rate, to 4.8%, and push up wages by 2.7% from a year earlier. That’s a bit faster than the yearly rate of 2.4% recorded in August.
A decent jobs gain of 150,000 or more, a drop in the unemployment rate and faster wage gains would signal the further improvement in the labor market that the Federal Reserve is looking for to justify its first quarter-point interest rate hike in a year. The end of the next Fed meeting is November 2, and it’s obvious that Fed Chair Janet Yellen has enough political sense not to do anything the week before the presidential election, lest she be blamed by one side or the other for trying to influence the results. Therefore, the Fed move will likely take place on December 14, safely after the election.
Continue reading “The Friday Jobs Report: Setting the Stage for the Federal Reserve’s December Rate Hike”
Hiring slowing to 150K-200K/month by end ’16
Look for job growth to gradually retreat into the range of 150,000 to 200,000 jobs per month — versus a strong 255,000 jobs added in July — as the hot employment market of the past few years downshifts to a more sustainable pace.
Continue reading “Pace of Job Growth to Slow”