Giving Thanks for Workforce Strength and Economic Bounty this Week
Well, it’s Turkey time again here in the good ol’ US of A and though its been some pretty tough going for the nation and the world in recent times, there is much to be thankful for this Thanksgiving. Particularly when it comes to the American workforce and the organizations that employ them. Here’s why there is bounty worth celebrating.
The most recent reporting by the Department of Labor revealed great decreases in the unemployment rate – even greater in the revised figures than in the early reporting for the quarter. In fact, nonfarm payrolls increased by 531,000 in October, beating the estimate of 450,000. This helped drive the unemployment rate down to 4.6%, a new pandemic low and better than expectations. In fact, according to Charles Evans, President of the Chicago Fed, unemployment is likely to continue to fall below 4% and could approach the 3.5% rate seen before the pandemic. Leisure and hospitality led job creation, followed by professional and business services and manufacturing.
At the same time as unemployment numbers are falling, wages are heading in the opposite direction which is also cause for thanksgiving (with a small “t”). BLS reports wages rising by 0.4% for the month. And wages are up a full 4.9% from where they sat a year ago. As evidenced by the so-called “Great Resignation”, it is clear that labor is experiencing a rising sense of power and their demands for better wages are being met.
Between the strong employment numbers and rising wages, the Federal Reserve on Wednesday announced its intention to begin scaling back the amount of money it is pumping into the economy through monthly bond purchases. This is a positive indicator for the US economy as we head into the busy holiday season. This should help offset the slower third-quarter growth which was largely restrained by Delta variant-driven shortages of goods.
Around every Thanksgiving table, there will surely be an uncle who is less optimistic about the state of the economy and will warn of the dangers of inflation as wages rise and the economy roars forward. What your cranky uncle should know is that Fed President Charles Evans has predicted that the supply-chain woes dragging on the U.S. economy are likely to be smoothed out in time to allow continued expansion in 2022. Evans said, “The reason why I think momentum will be good going into next year is because I think the supply-chain issues are going to be rectified,” during a discussion as part of the BKD Financial Services Virtual Symposium. As a result, the central banker suggested inflation data by the end of 2022 will be much closer to 2% than many think.
So, with all the good news regarding the American economy and labor force, we here at nextSource are preparing to celebrate with good food, family and friends this Thanksgiving. We would like to wish you and yours a truly happy, healthy and memorable Thanksgiving.
