x
Breaking News
0

U.S. Employment: Shortage Of Jobs...Or Workers?

By Ed YardeniMarket OverviewJun 06, 2016 12:06AM ET
www.investing.com/analysis/us-employment:-shortage-of-jobs-or-workers-200134051
U.S. Employment: Shortage Of Jobs...Or Workers?
By Ed Yardeni   |  Jun 06, 2016 12:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Total Job Openings 2001-2016
Total Job Openings 2001-2016

Payrolls rose just 38,000 during May, the weakest gain since September 2010, and the previous two months were revised downward by 59,000 collectively. However, something just doesn’t add up with these weak numbers. Consider the following:

(1) Record job openings. In March, total job openings rose to 5.76 million, nearly matching July 2015’s record high.

(2) Solid ADP payrolls. Private-sector payrolls as measured by ADP rose 173,000 during May, well above the measly gain of 25,000 reported by the Bureau of Labor Statistics. So far this year, the former is up 940,000 while the latter is up 699,000.

(3) Confidence survey upbeat. In the Conference Board’s monthly survey of consumer confidence, the percentage of respondents who said jobs are plentiful remained around recent cyclical highs at 24.3%.

(4) Earned Income Proxy still rising. Our Earned Income Proxy for total wages and salaries in the private sector rose 0.3% m/m during May to a new record high. It reflects the tiny increase in private payrolls as well as the 0.2% increase in average hourly earnings; the average workweek was unchanged. The EIP is up solidly by 4.2% y/y. (See our YRI-EIP.)

(5) Troubling signs. I think that in the worst-case scenario, the latest payrolls suggest that there may be a big skills mismatch between all those unfilled jobs and the available workers to fill them. More likely is that May’s weak report is misleading, though we are disturbed by the downward revisions in the prior two months. The 12-month sum of those revisions remains positive, but barely so—which in the past has been a harbinger of trouble for the labor market.

Furthermore, in May the percentage of industries reporting higher payrolls fell to 51.3% on a one-month span and 53.2% on a three-month span. Both are the lowest since 2010. May’s non-manufacturing PMI fell from 55.7 during April to 52.9 last month partly because its employment component fell from 53.0 to 49.7, back down at February’s reading, which was the lowest reading since February 2014.

ISM Non-Mfg PMI & Payroll Employment Diffusion Index 2004-2016
ISM Non-Mfg PMI & Payroll Employment Diffusion Index 2004-2016

U.S. Employment: Shortage Of Jobs...Or Workers?
 
U.S. Employment: Shortage Of Jobs...Or Workers?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
john bohn
john bohn Jun 07, 2016 5:19PM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
no shortage of bullsheet
Brad Smith
Brad Smith Jun 06, 2016 11:26AM GMT
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks for this insightful piece Ed. A shortage of skilled workers is a perspective I have not heard too much about these days. What I've heard from hiring managers in high skilled fields such as engineering corroborates this claim. This phenomenon likely has been in development for quite some time.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
 
 
 
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.