Here is a question that I don't see asked very much:
Could the US Savings rate be an indication that people are coming back to work?
The US savings rate soared since during the pandemic as the government poured money into people’s (and businesses) pockets via stimulus checks, enhanced unemployment benefits, child tax credit prepayments etc. Couple that with partial lockdowns that initially curtailed spending, the savings rate shot up.
With the expiration of most of the stimulus and with the rampant inflation that it caused; the savings rate has now returned to pre-pandemic levels (7.3% last month). We are now starting to see overall labor participation increase; unemployment claims fall and folks are returning to the workforce.
Companies have been increasing wages and adding other incentives to encourage workers to return to the talentforce.
The October JOLTS report that was just released shows a near record 11 million jobs available and an astonishing 4.8 million people quit their jobs as The Great Resignation continues.
November’s positives:
1. Temp Help was up again in November adding 6,200 jobs. Temp help is a leading indicator of the talent market and people often look to temporary roles as an avenue to reenter the talent market after a long layoff.
2. Unemployment claims fall again. The number of unemployed persons fell by 542,000 to 6.9 million. Both measures are down considerably from their highs at the end of the February-April 2020 recession.
3. Prime-age labor and overall participation rate was up .1% again last month
Analysis of the November Employment Report
· A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 7.4%.
· The change in total nonfarm payroll employment for September was revised up by 67,000, from +312,000 to +379,000, and the change for October was revised up by 15,000, from +531,000 to +546,000. With these revisions, employment in September and October combined is 82,000 higher than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)
· Prime age labor force participation rate (ages 25-54) was up this month at 81.8%. This number has been stagnant for a number of months and is still down by 1.3% since February 2020, the last month before the pandemic started.
· The overall labor force participation was up .1% to 61.7%.
· The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour to 34.8 hours in November. In manufacturing, the average workweek edged up by 0.1 hour to 40.4 hours, and overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at
34.1 hours.
· Average hourly earnings are up 4.8% from the same period a year ago, this reinforces that demand for labor is very strong.
· In November, average hourly earnings for all employees on private nonfarm payrolls increased by 8 cents to $31.03 and average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents to $26.40.
· APD reported that 534,000 jobs were created in November
Source: ADP, BLS, CNBC
JOLTS Report November 8, 2021
Job Openings
· On the last business day of October, the number of job openings increased to 11.0 million (+431,000). The job openings rate was little changed at 6.9 percent. Job openings increased in several industries with the largest increases in accommodation and food services (+254,000); nondurable goods manufacturing (+45,000); and educational services (+42,000). Job openings decreased in state and local government, excluding education (-115,000). The number of job openings increased in the South region.
Hires
· In October, the number of hires was little changed at 6.5 million. The hires rate was unchanged at 4.4 percent. Hires decreased in finance and insurance (-96,000). Hires increased in educational services (+54,000) and in state and local government education (+37,000). 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 October, the number of total separations edged down to 5.9 million (-255,000). The total separations rate was little changed at 4.0 percent. Total separations decreased in finance and insurance (-88,000) and in transportation, warehousing, and utilities (-64,000). Total separations increased in state and local government, excluding education (+28,000). Total separations were little changed in all four regions.
· The number of quits decreased in October to 4.2 million (-205,000). The quits rate decreased to 2.8 percent. Quits decreased in several industries with the largest decreases in transportation, warehousing, and utilities (-57,000); finance and insurance (-45,000); and arts, entertainment, and recreation (-33,000). Quits increased in state and local government, excluding education (+21,000) and in mining and logging (+6,000). The number of quits was little changed in all four regions.
· In October, the number of layoffs and discharges was little changed at 1.4 million. The layoffs and discharges rate was unchanged at 0.9 percent. Layoffs and discharges were little changed in all industries and in all four regions.
· The number of other separations was little changed in October at 373,000. Other separations decreased in finance and insurance (-33,000). The number of other separations increased in state and local government, excluding education (+8,000). 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 October 2021, hires totaled 73.8 million and separations totaled 68.1 million, yielding a net employment gain of 5.7 million. These totals include workers who may have been hired and separated more than once during the year.
Source: ADP, BLS, Wall Street Journal
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