“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” U.S. Chamber of Commerce chief policy officer Neil Bradley said in a statement Friday morning.
Nearly 60% of small business owners reported that they were trying to hire while 44% said they were struggling to fill job openings, according to the National Federation of Independent Business’ (NFIB) April jobs report released Thursday. Ninety-two percent of those looking for workers said there were few of no qualified applicants.
CNN gets its priorities screwed up, again
CNN on Friday appeared to downplay a hugely disappointing jobs report that included an uptick in the nation’s unemployment rate to focus instead on a “headache” regarding the White House lawn that was allegedly caused by the former Trump administration.
The Labor Department reported shocking job figures, noting that the economy only created 266,000 jobs after economists predicted that at least 1 million would be created as the country rapidly reopens amid the receding COVID-19 pandemic.
But, as Fox News reported, one of CNN’s lead stories Friday afternoon on its website “was the White House drama over how the Trump presidency kept the lawn.”
“The tight labor market is the biggest concern for small businesses who are competing with various factors such as supplemental unemployment benefits, childcare and in-person school restrictions, and the virus,” NFIB Chief Economist Bill Dunkelberg said in a statement. “Many small business owners who are trying to hire are finding themselves unsuccessful and are having to delay the hiring or offer higher wages.----------------------------------------------------------------------
Twenty-two percent of small owners generally report that they are struggling to find workers, according to the NFIB’s 48-year historical average.
“The huge miss in expectations is because the unnecessary additional unemployment benefits are incentivizing people to stay home,” Alfredo Ortiz, president of the Job Creators Network, and Steve Moore, co-founder of the Committee to Unleash Prosperity, said in a joint statement on Friday. “As we’ve been saying all along, the extension of unemployment benefits would hurt our recovery, and now we are seeing that in real time.”
“Additionally, President Biden’s relinquishing leadership to the teachers union on reopening schools has prevented people from getting back to work,” the statement continued.
Supply chain vulnerabilities
Risks of rising prices are intensifying across the economy as a growing number of companies warn that supply shortages and logjams will compel them to raise prices. In fact, tight inventories have seen prices surge for raw materials, ranging from semiconductors and steel to lumber (LB1:COM) and cotton (CT1:COM). Manufacturers are scrambling to replenish stockpiles to keep up with accelerating demand as eager shoppers take out their stimulus-filled wallets following a broad vaccine rollout.
Thought bubble: As commodities and materials become more expensive, the bigger question at the table is whether faster inflation sticks around. Putting it in perspective, a sheet of 3/4" plywood at Home Depot (HD) is now selling for around $60 (depends on location), up from about $30 before the pandemic - that's a 100% increase. Investors and policymakers alike are hoping that the price hikes prove transitory, though it's still too early to predict the future, and Treasury Secretary Janet Yellen even made waves this week by suggesting tools that could combat an overheating economy.
"Straight price increases will continue to be an important element as we look at the back half of the year," Colgate-Palmolive (CL) CEO Noel Wallace told investors after the company's Q1 results. "I anticipate that you'll see more price increases across the sector, given the headwinds that everyone has faced in this space." Many other companies have also warned of price increases and supply chain disruptions on their earnings calls, including Apple (AAPL), Coca-Cola (KO), Proctor & Gamble (PG) and Kimberly-Clark (KMB).
The economic angle: Longer lead times and orders booked far in advance could result in a robust demand floor that could encourage companies to invest in ramping up production and capacity. That would be great for economies coming out of the pandemic, but the opposite could also happen, in which volatility and uncertainty destroy demand as prices become too high for consumers. The phenomenon, called the "bullwhip effect," could end up damaging the economy in the short-term, with violent swings in a range of goods.