“The Fed Plans on Raising Interest Rates to Tame Inflation”.
Don’t let the headlines fool you. Staffers will play a much bigger role in reducing inflation that The Fed. The reason we are experiencing the worst inflation in 40 years is because the government printed money for too long to disincentivize people from producing. This caused consumers to continue to demand goods and services without enough people producing them. For example:
· Supply chain issues were caused by the lack of people to make or move products.
· When supplies run low, prices increase and they should – otherwise there will be even more shortages.
· When talent can make enough money by not producing – then labor costs go up in order to incentivize people to come back into the talent force.
Staffers are on the frontlines of bringing talent back and the fruits of their labor is starting to pay off. The labor participation rate increased again this month for both prime age and the labor force as a whole. I think inflation will start to ease around the 4th quarter of this year and the Fed will ease off on raising rates.
Here are the highlights of this month's jobs report:
· Nonfarm payrolls grew by 431,000 in March, a bit below the 490,000 estimate and well under February’s upwardly revised 750,000.
· The unemployment rate declined to 3.6%, beating expectations.
· Leisure and hospitality led the gains, followed by professional and business services and retail trade.
· 5th straight month of labor participation gains among prime aged workers
Analysis of the March Employment Report
· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 6.9%.
· Prime age labor force participation rate (ages 25-54) was up .3% this month at 82.5%. This number is up .9% since September and is now down by only .5% since February 2020, the last month before the pandemic started.
· The overall labor force participation is 62.4% up .1%.
· Average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents to $31.73 in March. Over the past 12 months, average hourly earnings have increased by 5.6 percent. In March, average hourly earnings of private sector production and nonsupervisory employees rose by 11 cents to $27.06.
· The average workweek for all employees on private nonfarm payrolls fell by 0.1 hour to 34.6 hours in March. In manufacturing, the average workweek for all employees was unchanged at 40.7 hours, and overtime fell by 0.1 hour to 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 34.1 hours.
· APD reported that 455,000 jobs were lost in January
Source: ADP, BLS, CNBC, ABC News
JOLTS Report March 29, 2022
Job Openings
On the last business day of February, the number of job openings was little changed at 11.3 million. The government estimates that there are about 5 million more available jobs than there are workers available.The number and rate of job openings were little changed at 11.3 million and 7.0 percent, respectively. Job openings decreased in finance and insurance (-63,000) and in nondurable goods manufacturing (-39,000). Job openings increased in arts, entertainment, and recreation (+32,000); educational services (+26,000); and federal government (+23,000). Job openings decreased in the Midwest region and increased in the West region.
Hires
In February, the number of hires edged up to 6.7 million (+263,000). The hires rate was little changed at 4.4 percent. Hires increased in construction (+75,000). Hires decreased in information (-29,000). The number of hires was little changed in all four regions.
Separations
Total separations includes quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.
In February, the number and rate of total separations were little changed at 6.1 million and 4.1 percent, respectively. Total separations decreased in information (-45,000) and in finance and insurance (-41,000). The number of total separations was little changed in all four regions.
In February, the number and rate of quits were little changed at 4.4 million and 2.9 percent, respectively. Quits increased in retail trade (+74,000); durable goods manufacturing (+22,000); and state and local government education (+14,000). Quits decreased in finance and insurance (-30,000). The number of quits was little changed in all four regions.
In February, the number of layoffs and discharges was little changed at 1.4 million. The rate was unchanged at 0.9 percent. Layoffs and discharges decreased in information (-60,000). The number of layoffs and discharges was little changed in all four regions.
The number of other separations was little changed in February at 355,000. Other separations increased in retail trade (+20,000) and in information (+9,000). The other separations level decreased in finance and insurance (-19,000); transportation, warehousing, and utilities (-16,000); and real estate and rental and leasing (-6,000). Other separations were little changed in all four regions.
Net Change in Employment
Large numbers of hires and separations occur every month throughout the business cycle. Net employment change results from the relationship between hires and separations. When the number of hires exceeds the number of separations, employment rises, even if the hires level is steady or declining. Conversely, when the number of hires is less than the number of separations, employment declines, even if the hires level is steady or rising.
Over the 12 months ending in February 2022, hires totaled 77.0 million and separations totaled 70.6 million, yielding a net employment gain of 6.4 million. These totals include workers who may have been hired and separated more than once during the year.
Establishment Size Class
In February, the quits rate increased in large establishments with 1,000 to 4,999 employees. For a more in-depth description of the JOLTS establishment size class estimates, please visit
www.bls.gov/jlt/sizeclassmethodology.htm.
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