Workers needed?
EDITOR'S NOTE
I've been scratching my head in recent weeks at all the "Help Wanted" signs in town.
Several of our local restaurants have them. One of the more popular ones has a huge banner up to advertise its hiring needs. It's a little odd. Aren't we in the midst of the worst depression in our lifetimes? (I have never been in that camp.) If so, restaurants would hardly need to advertise their need to fill openings for weeks at a time.
But then it cropped up in the Fed's "beige book" report this week, too. The Kansas City Fed--which covers the second-biggest region in the country, including the states of Colorado, Oklahoma, and Nebraska--reported labor shortages in the restaurant industry (page J-1). Our intrepid Kate Rogers reported that 77% of restaurants who added to their payroll this summer (which was two out of five overall) had difficulties finding workers. Evan Sohn noted a similar trend in recruiting on our show the other day.
Now this may well reflect three particularities of the labor market right now: (1) workers may not want to take the health risk of restaurant work; (2) especially if scaled-back dining means tips and pay are light; and (3) if unemployment benefits are helping to cover their lost income.
But as unemployment benefits wane--it's now been almost six weeks since the extra $600 federal benefit expired--it's possible some restaurant workers are returning to other jobs than they had before. Certainly the August jobs report out this morning was encouraging. Nearly 1.4 million jobs were added last month while the unemployment rate fell to 8.4%--a level many thought we wouldn't see til next year. And FedEx, for instance, will be hiring 70,000 workers this holiday season--a 27% increase from last year.
It's no wonder talks in Washington over the next round of stimulus have stalled. It's a lot less clear what Congress's priorities should be now. And it also makes you wonder about the market's big selloff yesterday. The worst performers were this year's high-flying technology and "stay-at-home" trades. The outperformers were retail, cruise lines, airlines, and hotels, along with the energy and financial sectors. Other than the fact that interest rates were dropping yesterday, I'd score a big one for the "reopening" rotation, which would hardly make this the "bad" kind of market selloff.
And today, rates are part of the story. As I write this, the Nasdaq is down nearly 400 points, or another 3.5%. The worst performers are this year's classic "shutdown" plays, Zoom, PayPal, and Nvidia, while the 10-year yield is creeping back up. All of which is to say, this doesn't smell like a reversal of the economy's reopening. It feels like a reversal of the "at home forever" trade, and I would welcome that.
See you at 1 p.m...
Kelly
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