U.S. Initial Unemployment Claims Drift Lower
Initial claims for unemployment insurance fell 34,000 in the week ended May 15 to 444,000 from a slightly revised 478,000 in the previous week (initially 473,000). The Action Economics Forecast Survey panel expected 460,000 new claims. The latest week’s figure represents still another new low since the start of the pandemic in March 2020, but as we pointed out last week, it remains larger than pre-pandemic levels, which were somewhat above 200,000. The 4-week moving average was 504,750 in the week ended May 15, also a pandemic low, from 535,250 in the previous week.
Initial claims for the federal Pandemic Unemployment Assistance (PUA) program declined by 8,592 (actual number, not rounded) to 95,086 in the week ended May 15 from a revised 103,086 (initially 103,571) in the previous week. The PUA program provides benefits to individuals, such as the self-employed, who are not eligible for regular state unemployment insurance benefits. Given the brief history of this program, these and other COVID-related series are not seasonally adjusted.
Continuing claims for regular state unemployment insurance rose 111,000 in the week ended May 8 to 3.751 million from 3.640 million the previous week. The state insured rate of unemployment ticked upward to 2.7% from 2.6% in the prior week. It reached 15.9% in May 2020, while the average rate in 2018 and 2019 was 1.2%.
Continuing PUA claims were 6.605 million in the week ended May 1, down 679,000 from the week before. Also in the May 1 week, the number receiving Pandemic Emergency Unemployment Compensation (PEUC) fell 150,000 to 5.141 million. This program covers people who have exhausted their state benefits.
The total number of all state, federal, and PUA and PEUC continuing claims was 15.975 million in the May 1 week, down from 16.862 million the week before and the lowest since 12.586 million in the week of April 4, 2020, just as the pandemic-related unemployment programs were getting under way. This grand total is not seasonally adjusted.
(Bespoke)
FLASH PMIs
The headline IHS Markit Eurozone Composite PMI® rose from 53.8 in April to 56.9 in May, according to the preliminary ‘flash’ reading, which is typically based on approximately 85% of final responses. The latest reading was the highest since February 2018 and indicated a third successive month of output growth.
New order growth meanwhile surged to the highest since June 2006, outpacing growth of output to the greatest extent in the survey’s 23-year history. Backlogs of uncompleted orders consequently rose to a degree not surpassed since that series began in November 2002, underscoring the growing shortfall of current output relative to demand.
Businesses meanwhile view the outlook as increasingly positive, with optimism about the year ahead the brightest since comparable data on future sentiment were available in 2012, most commonly linked to the vaccine roll-out permitting a further relaxation of COVID-19 restrictions in the coming months.
The strengthening of demand and brighter outlook prompted firms to again take on extra staff, with employment rising for a fourth successive month in May. However, although the rate of job creation remained the second-highest in just under two years, it waned slightly due to instances of difficulties in filling job vacancies.
By sector, the upturn continued to be led by manufacturing, where output grew for an eleventh straight month with the rate of expansion easing only modestly further from March’s all-time high.
Factories also reported that new order growth waned slightly for a second month running, but remained the third-highest in the survey’s history – and strong enough to generate a new record rise in uncompleted backorders for a third straight month. Inventories of finished goods stock fell at a rate not seen since 2009 as firms increasingly met demand from existing stock.
The inability of factories to produce sufficient output to meet orders was in part due to a new record lengthening of input delivery times as supply chains continued to deteriorate.
However, while manufacturing reported the strongest growth rate, it was the service sector that drove the overall improvement in performance. Having eked out a marginal increase in April for the first time in eight months, business activity across the region’s service sector expanded in May at a rate not seen since June 2018 as the easing of COVID-19 related restrictions facilitated a revival in demand. New orders for services rose for the first time since last July, growing at the fastest pace since January 2018. Backlogs of uncompleted work in the service sector also grew at the sharpest rate for over three years, reflecting short-term capacity constraints at many firms.
With demand continuing to run ahead of supply for many goods and services, inflationary pressures increased again in May.
Average input prices rose at the sharpest rate since March 2011, led by the largest rise in factory input costs recorded since survey data were first available 24 years ago. Service sector costs also grew at an increased rate, registering the sharpest rise since November 2018.
Average prices charged for goods and services meanwhile rose at the fastest pace since comparable data were first available in 2002, fueled by a survey-record increase in factory gate prices. Prices charged for services rose modestly by comparison, through showed the biggest increase for just over two years.
By country, growth accelerated especially sharply in France, reaching its highest since July 2020 on the back of accelerating manufacturing output growth (the fastest since January 2018) and resurgent service sector activity (the strongest since last July).
Germany also saw business output rise at an increased rate after growth waned in April, notching up the second-strongest performance since February 2018. While the service sector enjoyed the biggest gain in activity since last July, the manufacturing sector saw growth slow from the recent record pace of expansion thanks to supply chain bottlenecks.
However, it was in the rest of the region where the strongest increase in business activity was recorded in May, with growth outside of France and Germany hitting the fastest since the start of 2018 thanks to a record jump in manufacturing output and the largest increase in service sector activity since February 2018.
(…) This imbalance of supply and demand has put further upward pressure on prices. How long these inflationary pressures persist will depend on how quickly supply comes back into line with demand, but for now the imbalance is deteriorating, resulting in the highest-ever price pressures for goods recorded by the survey and rising prices for services.
The headline seasonally adjusted IHS Markit / CIPS Flash UK Composite Output Index rose to 62.0 in May, from 60.7 in April, to signal the fastest rate of growth since the index was first compiled more than two decades ago. Survey respondents widely commented on a post-lockdown bounce in business and consumer confidence, alongside higher output levels due to the phased reopening of customer-facing areas of the UK economy.
May data pointed to the fastest increase in average cost burdens across the UK private sector since August 2008. Manufacturers mostly commented on price pressures due to shortages of raw materials and high shipping costs, while service providers often noted increased staff salaries. Strong customer demand helped to confer a greater degree of pricing power to private sector businesses in May, as signalled by the strongest rate of output charge inflation since this index began nearly 22 years ago.
Business expectations for the next 12 months edged up to a new record high during May, largely reflecting a surge in order books and a faster than anticipated recovery in demand since the lockdown period. Among the small minority of firms citing downbeat expectations, this was mainly attributed to Brexit related issues. Some also cited worries about the prospect of prolonged international travel restrictions. However, there was a notable easing of concerns about future lockdowns and adverse impact on business activity from COVID-19.
At 66.1 in May, up from 60.9 in April, the seasonally adjusted IHS Markit/CIPS Flash UK Manufacturing Purchasing Managers’ Index® (PMI®) reached its highest level since the survey began in January 1992. This was helped by steep increases in output, new orders and employment, alongside a return to growth for the stocks of purchases component. The exceptionally high PMI reading also reflected a rapid lengthening of suppliers’ delivery times during May (this component has a 15% weight in the Manufacturing PMI).
Manufacturing production (index at 63.2) gained considerable momentum in May, with the rate of growth the strongest since August 2013. Around 43% of the survey panel reported an increase in output since April, while only 15% signalled a decline. Moreover, among the minority reporting a drop in production, this was overwhelmingly attributed to supply issues (both materials and staff availability).
New orders increased at the strongest pace since data collection began almost 30 years ago (index at 69.1 in May), exceeding the previous record that had stood since July 1994. A rapid upturn in domestic demand was reported by manufacturing companies, driven by sales related to the reopening of the UK economy (especially the hospitality sector).
Workloads were also boosted by a turnaround in export sales, with new orders from abroad rising at the strongest pace since this index began in January 1996. Manufacturers noted a sharp improvement in demand from the US and China, alongside an easing in Brexit-related difficulties with exporting to EU clients.
Severe delays continued across global supply chains in May, as signalled by a steep lengthening of vendors’ delivery times. Goods producers responded by accumulating stocks of purchases for the first time in 2021 to date. Strong demand for manufacturing inputs, higher transport bills and a spike in commodity prices resulted in the fastest increase in overall purchasing costs since this index began in January 1992.
Adjusted for seasonal influences, the IHS Markit/CIPS Flash UK Services PMI® Business Activity Index reached 61.8 in May, up from 61.0 in April and above the 50.0 no-change value for the third month running. The latest reading indicated that service sector activity expanded to the greatest extent since October 2013. This was helped by the partial reopening of the hospitality sector and roll back of pandemic restrictions, alongside strong rises in spending by both consumers and businesses in May.
There were also positive near-term signals for activity in the service economy, with new business volumes and backlogs of work increasing at the sharpest rates for around seven-and-a-half years. Positive expectations for the business outlook meant that job creation accelerated to its strongest pace since May 2015.
(…) A direct consequence of demand running ahead of supply was a steep rise in prices, hinting strongly that consumer price inflation has much further to rise after lifting to 1.5% in April. However, the inflationary spike could prove temporary, as many of the price hikes have reflected surcharges on shipping and other shortage-related issues emanating from the pandemic. As these constraints ease, price pressures should abate, but there remains a great deal of uncertainty as to how long it will take for global business and trade to return to normal functioning, especially if new virus variants appear.
At 52.5, the headline au Jibun Bank Japan Manufacturing Purchasing Managers’ Index™ (PMI)® dipped from 53.6 in April to signal a softer, yet still moderate improvement in operating conditions. Both output and new order growth eased in the latest survey period. That said, manufacturers remained confident in taking on additional staff as job creation continued for the second successive month. Moreover, positive sentiment picked up in May, with the level of optimism the joint-strongest since the survey began posing the question in July 2012.
The au Jibun Bank Flash Japan Services Business Activity Index fell from 49.5 in April to 45.7 in May, indicating a sharper deterioration in the service sector, and one that was the most marked since August 2020. New business inflows reduced for the sixteenth month in a row, amid renewed restrictions on movement. Positively, job creation continued for the fourth consecutive month at Japanese service sector firms though the rate of growth slipped to the softest for three months. Firms also remained confident that activity would increase over the next 12 months, however optimism dipped to the lowest in the current nine-month sequence of positivity.
Flash PMI data indicated that activity at Japanese private sector businesses saw a renewed reduction in May. Output fell at the quickest pace for four months, while the contraction in new business inflows was the fastest since February. Survey members widely attributed the deterioration in business conditions to a resurgence in COVID-19 cases and the reimposition of state of emergency measures.
Positively, private sector firms were not discouraged from further increasing capacity, as employment levels rose for the fourth consecutive month. This was despite another sharp rise in input costs across the Japanese private sector.
Disruption to short-term activity is likely to remain until the latest wave of COVID-19 infections passes and restrictions enacted under state of emergency laws are lifted. However, Japanese private sector companies were optimistic that business conditions would improve in the year ahead, albeit to a lesser extent than that seen in April. Positive sentiment stemmed from the expectation that the currently sluggish vaccine rollout would gather pace and aid in the submission of the pandemic, in turn triggering a recovery in demand in both domestic and external markets.
Housing Is So Hot That U.S. Builders Have to Stop Taking Orders Long waiting lists, rising construction costs and labor shortages send new-home prices soaring
Demand is so fevered — and construction costs are climbing so quickly — that overwhelmed builders are suppressing orders and shifting away from fixed prices. Companies including D.R. Horton Inc. and Lennar Corp. are experimenting with blind auctions in areas such as Texas, Florida and southern California. Some smaller firms have stopped signing contracts altogether.
“We’ve shut off sales until homes are nearly completed,” said Greg Yakim, a partner at CastleRock Communities, a privately held builder in Texas. “We have huge waiting lists.” (…)
But they’re waiting as long as possible to take orders because delays are common and future costs uncertain. And why lock in specific prices into contracts when they’re likely to be much higher when homes are completed? (…)
About 19% of builders are delaying sales or construction and 47% have added escalation clauses into contracts, allowing them to lift prices as costs increase, according to an April survey by the National Association of Homebuilders. (…)
“The builder’s job has gone from trying to sell homes to trying to build homes.” (…)
Percentage of Respondants Who Think It’s A Bad Time To Buy A Home Because Prices Are Too High…
(The Market Ear)
The Bank of Canada has a stark message for Canadians: Interest rates are guaranteed to increase but home prices are not.
With the pandemic’s low interest rates pushing over-leveraged borrowers to pile on mortgage debt, the central bank ranked household indebtedness and accelerating home prices among the biggest threats to the economy in the medium term. (…)
The bank found that the share of highly indebted households taking out mortgages is up significantly and now represents 22 per cent of all new mortgages.
That is higher than during the 2016-2017 real estate boom, when spiking mortgage debt triggered stricter lending rules from Ottawa. In addition, highly indebted borrowers are making down payments that are less than 20 per cent of the purchase price of the property. (…)
Despite the increased risks in the housing market, the central bank said that systemic risks to the financial sector remain low. Canada’s banks are well-capitalized, partly as a result of reforms taken in the wake of the 2008 financial crisis, and performed well throughout the pandemic. (…)
Alongside the report, the central bank introduced a “House Price Exuberance Indicator” to detect periods of “extrapolative expectations,” or the anticipation by buyers that home prices will continue to rise. Under the new measure, the Toronto region, Montreal and Hamilton are firmly in exuberant territory with Ottawa nearing that level. (…)
Prime Minister Justin Trudeau’s government set a new benchmark interest rate on Thursday afternoon to determine whether people can qualify for mortgages that are insured by Canada’s housing agency. The move matches an April decision by the nation’s banking regulator to do the same for uninsured mortgages.
The regulator — the Office of the Superintendent of Financial Institutions — announced earlier Thursday it would implement its new rules June 1.
Those steps coincided with a stern warning from Bank of Canada Governor Tiff Macklem in the morning cautioning that Canadians should neither assume interest rates will remain at historic lows nor expect recent sharp gains in home prices to continue. (…)
With the changes, home buyers will have to show they can afford a minimum rate of 5.25%. The current threshold, based on posted rates of Canada’s six largest lenders, is 4.79%. Economists have been estimating the tighter qualification restrictions would reduce the buying power of households by about 5%. (…)
UK retail sales surge, but can it last?
Even with the reopening of shops, April’s surge in retail sales was considerably higher than expected. The 9% month-on-month jump now means sales are 10% above pre-pandemic levels.
What’s particularly stark is just how much clothing/footwear sales jumped – recovering to pre-virus levels in April, having been some 40% below in March. To some extent, a recovery here was always likely – we’ve long felt that the underperformance of clothing was linked to the closure of events, and the reopening roadmap potentially means shoppers are stocking up on items for socialising and gatherings.
But the rebound speed is nevertheless surprising, particularly given sales around Easter are often driven by weather and a feeling of summer arriving – which I think it’s fair to say hasn’t been the case…
Clothing sales drive retail sales rebound
Source: Macrobond, ING
(…) With the reopening of services, consumers once more have a wider array of things to spend their money on – as evidenced by social spending (measured by CHAPS data) now at its highest level since the start of the pandemic. And while the consumer, on average, has a decent amount of spending power owing to the large pool of cash savings, this has been heavily concentrated in higher earners, whose propensity to spend is typically a bit lower. (…)
In the USA, the Chase consumer card spending tracker remains solid, up 11.3% over 2 years ago as of May 16. Discretionary spending is up 30% from its Jan. 2019 level. Spending on travel and entertainment just recently reached back to their January 2019 level.
Food Supply Chains are Stretched as Americans Head Back to Restaurants Americans are returning to restaurants, bars and other dining places as Covid-19 restrictions come down, adding new strains in food supply chains.
Suppliers and logistics providers say distributors are facing shortages of everyday products like chicken parts, as well as difficulty in finding workers and surging transportation costs as companies effectively try to reverse the big changes in food services that came as coronavirus lockdowns spread across the U.S. last year.
“Over the last six weeks, we have seen the market come roaring back faster than anybody would have anticipated,” said Mark Allen, chief executive of the International Foodservice Distributors Association. “The start up has been, in many ways, as difficult as the shutdown…Everybody is trying to turn it on immediately and the capacity might not be there.” (…)
Restaurants, hotels and institutional food-service operations are coping with big price swings on staple ingredients and erratic availability, according to food and beverage consulting firm JPG Resources LLC. (…)
Broader supply-chain upheaval is also hitting food distributors, delaying shipments of overseas products like tuna and olives and holding up delivery of corrugated cardboard and other packaging materials, she said. “We can make salad dressing but we can’t make the bottles to sell the salad dressing.” (…)
The average price on the U.S. spot market for refrigerated truck transport reached $3.09 a mile in early May, up 20.7% from the average rate in February, according to DAT Solutions LLC, which runs a load board connecting trucks to shippers. It was the first time the company had seen the rate surpass $3.
Supply-chain executives say the lack of available workers may be the biggest strain on the sector since the impact cascades from the production facilities to trucking to distribution centers. (…)
These are truly transitory.
This next story, hopefully.
Food prices have jumped by nearly a third over the past year, according to the Food and Agriculture Organization of the United Nations, even as pandemic-related job losses are making it harder for families to afford basic staples. Corn prices are 67% higher than a year ago, the FAO says, while sugar is up nearly 60%, and prices for cooking oil have doubled.
Overall prices have risen for 11 consecutive months to the highest levels since 2014, the FAO says.
Many, though not all, of the causes are linked to Covid-19. Global food supply has largely held up after some initial disruptions last year, experts say.
But pandemic-related restrictions on movement have added to logistical costs. Weaker currencies in many developing countries that are struggling to rebound from Covid-19 have made food imports more expensive—-and conversely, in countries such as Brazil, led to greater exports of food, which are now cheaper for foreign buyers, restricting domestic supply. (…)
“The combination of the two, rising prices and no purchasing power, is the most lethal thing you could deal with.” (…)
The WFP says 270 million people are suffering from acute malnutrition or worse situations in the 79 countries in which the agency operates—double the number in 2019.
Other factors have exacerbated the situation. China’s rapid economic recovery has added demand, including for feed to rebuild pig herds, struck by disease in recent years. Such feed contains staples such as corn and soybeans, which are also consumed by humans. Adverse events including dry weather in Argentina and Brazil in October and locust infestations in African nations have also contributed. (…)
The World Bank estimates that up to 124 million people sank below the international poverty line—living on less than $1.90 a day—in 2020 as a result of the pandemic. Up to 39 million people more are expected to be added in 2021—taking the total number of those living in extreme poverty to 750 million people. (…)
The despair has even hit wealthier developing nations like Chile, where government data shows the return of malnutrition among school-aged children, a problem which had been virtually wiped out previously. (…)
THE INFLATION DEBATE
David Rosenberg, a non-inflationist, reacted to Bloomberg’s Wednesday article Specter of 1960s Inflation Take-Off Haunts U.S. Economy Today (not to my own Tuesday piece THE INFLATION DEBATE: JFK, LBJ, JOE AND JAY of course) presenting “critical differences”. It’s always important to hear people with opposite views and test them against our owns.
- (…) keep in mind that what added fuel to the fiscal fire was the Tax Reduction Act of 1964, which cut top marginal personal rates from 91% to 70% and the corporate rate from 52% to 48%.Think tax cuts are in our future?
The magnitude of the past, current and coming fiscal stimulation is amply more than any tax cut. There’s already more than $2 trillion of excess savings in Americans’ bank accounts.
2. (…) Wars are always inflationary. And in the 1960s and 1970s, we had an 11-year Vietnam war. Do you think we are into an 11-year war with the COVID-19 pandemic?
Wars are inflationary, boosting demand for defense goods and contracting supply for many if not most other goods/services. This pandemic boosted demand (still does) for most goods and contracted supply (still does) for most goods. The global demand/supply imbalance is extraordinary and is compounded by Trump’s tariff war and changing supply chains.
3. The U.S. economy was far less flexible back then. Measures of regulation and red tape are 10% lower today and domestic competition —a pervasive price-constraint —is nearly 20% higher than it was back then.
A contentious issue. Barclays’ analysts created a new measure for competitiveness: the Barclays Competitiveness Indicator. “The BCI helps gauge whether increased
concentration is hindering competition.” Their 2019 conclusions:
Market concentration has increased in the US on aggregate and within most markets. Such concentration is consistent with both the market power and winner-take-all narratives. However, we see declines in US market competitiveness as the dominant dynamic.
4. Productivity averaged a mere 1% per year in those inflationary years of the late 60s to the early 80s. At the same time, labor compensation surged more than 10% annually. The wage hikes back then were not a one-off —they were recurring, year in and year out. Unit labor costs exploded. Today, compensation is running south of 3% and productivity is now running above a 4% trend. Quite a difference.
On total productivity (blue line), I don’t find the current period so different. Unit labor costs exploded, but only after Q2’66. Let’s see what happens in the next several years.
5. Fully 22% of the workforce was unionized back in the 60s and 70s. That share is now 10.8%. In the private sector, the share has plunged from 17% to 6%. Back then, a COLA was an annual reset that blazed the trail for a wage-price spiral. Today a COLA is a sweet sudsy drink.
The pandemic seems to have changed wage dynamics, particularly on the lower wage tiers. The combo of rising minimum wages and labor scarcity pushes several large employers to volunteer improved working conditions, including higher wages.
6. Global competitive pressures —not even Trump and Bannon could do anything about this. Global trade volume flows are 4x larger than they were in the 60s and 70s. Ever heard of the Tokyo Round of GATT negotiations that eliminated tariffs and attacked non-tariff barriers for 102 countries? Well, prior to 1979, that disinflation global trust didn’t exist.
Globalization is being reconsidered just about everywhere. Supply chains are reviewed and reworked even at the cost of additional complexity.
7. Don’t forget —it wasn’t really LBJ as much as Nixon closing the gold window in 1971 that got the inflation ball rolling. We already live in a world of flexible exchange rates so there is no such shock in coming off a fixed currency regime.
U.S. inflation jumped from 1.0% between 1960 and 1965. It reached 6.4% in February 1970. That ball was rolling all right, without any oil or other supply shocks.
8. Back in the 60s and 70s, we had much more vibrant demographics. The birth rate was 38% higher then and the fertility rate was 34% higher. Average household size was 12% larger than it is today. The 65+ age population share then was less than 10% in the 60sand 70s and today is at 17% and rising. For all the talk of the spend-happy Millennials, the reality is their lack of job prospects has 18% of those between the ages of 25-34 living with their folks today, double the 9% share in the 60s and 70s. Where are these comparisons ever noted in these other commentaries?
Valid point for the longer-term, probably not sufficient to offset demand potentially coming from the current huge excess savings.
9. We are in a household deleveraging phase right now. Does this ever get mentioned?
Let’s see how that goes in a post pandemic world. Americans have hugely deleveraged in the past 18 months. Dry powder?
10. Money velocity actually was on a mild uptrend in the late 1960s and 1970s (accentuating the inflation caused by the rampant growth in the monetary aggregates) versus the downtrend in recent decades (and -19% YoY as of Q1) 15% versus 11% today.
Velocity rose from 1.6 to 1.8 between 1965 and 1970. Given the recent humongous rise in money supply, let’s hope velocity does not rise too much from here!
11. Finally, and this relates to the secular contraction in the money and credit multipliers, but the 1970s started with an all-economy debt-to-GDP ratio of 143%. Today, that ratio sits at a record 366%. This may be the most deflationary statistic that truly does render comparisons nonsensical.
Yes, Fed-induced. The piper will eventually need to get paid. But will this leverage make the Fed more cautious in raising rates?
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Another Inflation Warning The Philadelphia Fed finds historic price surges.
(…) The Philadelphia Fed reports:
Price increases were more widespread this month for the firms’ inputs and own goods. The prices paid diffusion index increased 8 points to 76.8, its highest reading since March 1980. Nearly 77 percent of the firms reported increases in input prices, while none reported decreases. The current prices received index increased 7 points to 41.0, its highest reading since May 1981.
Any comparison to 1980, when consumer price inflation was hitting its ghastly double-digit peak, is not reassuring. Fed officials keep insisting current price surges are just temporary. But the Philadelphia Fed report suggests that business executives aren’t expecting the phenomenon to end tomorrow. Firms in the survey were asked to forecast “the changes in the prices of their own products and for U.S. consumers over the next four quarters.” The Philly Fed notes:
Regarding their own prices, the firms’ median forecast was for an increase of 5.0 percent, an increase from 3.0 percent when the question was last asked in February. The firms’ actual price change over the past year was 2.3 percent. The firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise 4.0 percent over the next four quarters, an increase from 3.0 percent in the previous quarter. When asked about the rate of inflation for U.S. consumers over the next year, the firms’ median forecast was 4.0 percent, an increase from 3.0 percent in the previous quarter.
At least the firms’ forecast for long-run inflation didn’t increase since the last survey, so perhaps the people who run manufacturing companies maintain some faith that Fed officials know what they’re doing. (…)
- As Amazon, McDonald’s Raise Wages, Small Firms Struggle to Keep Up Companies are forgoing investment and turning down contracts as they compete with unemployment benefits and wage increases at larger firms.
(…) Some of the smallest firms said they are feeling acute pain because they have fewer people to pick up the slack and can’t easily match the pay increases, benefits and other perks that larger companies are offering to fill openings. (…)
According to Vistage’s survey, 62% of small businesses that have had trouble hiring said that in response, they are boosting wages for employees and working on developing their existing workforces. (…)
Amazon is aiming to hire 75,000 employees and is offering some of them $1,000 signing bonuses. McDonald’s Corp. said it is raising wages for workers at the restaurants it owns. (…)
Ellen Wood, chief executive and co-founder of the Austin, Texas-based professional services firm VCFO, said she is finding that more candidates want to work completely virtually.
“That’s a brand-new competitive element,” she said. (…)
CRYPTOS
- Biden targets crypto transfers in tax crackdown plan Proposal to close ‘tax gap’ would require cryptocurrency transfers over $10,000 be reported to IRS
- Bank of Canada Calls Crypto Assets an Emerging Vulnerability
The Bank of Canada said volatility in cryptocurrency assets is an emerging vulnerability to the country’s financial system, a day after a major selloff in the sector.
In its annual review of financial risks, policy makers led by Governor Tiff Macklem said Thursday that while crypto markets are not yet of systemic importance as an asset class or method of payment, that could change “if a large technology firm — a so-called Big Tech — with a sizable user base decided to issue a cryptocurrency that became widely accepted as a means of payment.” (…)
The central bank also flagged risks associated with so-called stablecoins — cryptocurrencies that are pegged to a more stable asset to reduce volatility. If widely used, they have the potential to disrupt the bank’s monetary policy mechanisms. “Unless stablecoins are backed exclusively by Canadian dollars, their widespread adoption could inhibit the Bank’s ability to implement monetary policy and act as lender of last resort,” the bank said. (…)
“Despite the broadening institutional interest in cryptoassets, they continue to be considered high risk because their intrinsic value is hard to establish,” the Bank of Canada said.
Hard?