Maybe you’re at a local restaurant waiting on your entree and reading this post. What is taking so long? Are they short-staffed? Maybe so.
Help Wanted
As the economy continues to recover from the pandemic, we are all itching to get out and about. The problem is many businesses are having a tough time finding enough workers to meet increasing demand from all of us hitting the town after being cooped up much of the last 14 months. Look no further than what’s happening at the restaurant scene.
Incentives Matter
Back and front of the house staff often have low wages (particularly before tips), and with unemployment compensation running high right now due to additional provisions care of government stimulus, some workers are making the understandable choice to remain ‘unemployed’ versus heading back to work. On Friday, the Chamber of Commerce said it would be going ahead with a new lobbying push against the $300 unemployment benefits, according to Bloomberg. We’ll wait and see how much political support that potential change receives.
Soft April Employment Report
In the meantime, Friday also marked the release of April jobs data. The headline number of new jobs created last month came in well below expectations while workers’ earnings were better than Wall Street experts forecast. The news immediately sparked the narrative of there not being enough workers to meet demand – perhaps attributed to the current unemployment benefits situation. Interestingly, the stock market rallied sharply.
Job Growth by Month (CNBC)[i]
Month-to-month changes in employment numbers are not a big deal most times. It will fluctuate, and the stock market often reacts in unexpected ways regardless. So knit-picking the numbers is futile. We’d rather spend that time outside cultivating the garden; it is May in Michigan, after all. What’s important, though, is we could have a new set of issues this summer and beyond due to the pandemic’s effects.
Inflation on the Way?
We’ve all seen what’s been going on with real estate, crypto, and some commodity prices (at least if you’ve been keeping up with the Weekly Happenings, which we trust you have been). It has been a long time since our economy faced labor shortages and significant inflation – that combination could be on the way if companies continue to have trouble procuring raw materials at reasonable prices and consumers keep demanding goods and services.
“Pent-up demand” sounded great a few months ago when we were still concerned about a weak economy, but it can have some not-so-pleasant side effects. Sort of like the fever you might have been socked with following being vaccinated.
If you are in the process of buying a home or renovating a room, you feel it front and center. Delays on new home construction and even simple kitchen cabinets are high as producers curtailed lumber production a year ago. Companies scaled back not only due to low economic activity, but employers also wanted to protect workers from the virus. We now see that ramping everything back to normal takes time.
Is your burger ready yet? A few more minutes, they’ll say. Wait times and higher prices should be the expectation, but the hope is that it will be short-lived.
The Point
The monthly jobs report was disappointing and the greater than normal unemployment benefit could be trimmed back. May we live in interesting economic times.
Ding, ding! Order up!
(P.S. File your taxes. The deadline is Monday May 17!)
We’ll talk soon!
[i] https://www.cnbc.com/2021/05/07/jobs-report-april-2021.html