Number of job openings in US at record high There will be more than one job for every unemployed person on current trends
U.S. JOLTS: Job Openings Rate Improves; Hires Stabilize
(…) The level of job openings surged 7.8% (16.8% y/y) after falling in February. Private sector openings rebounded 8.0% (16.5% y/y) to 5.928 million. Openings in construction surged 38.5% y/y and increased 26.4% y/y in trade, transportation & utilities. Professional & business services job openings gained 20.6% y/y while leisure & hospitality openings rose 17.0% y/y. Openings in education & health services increased 13.8% y/y, but to the downside were factory sector openings where they eased 0.7% y/y. Openings in government surged 20.3% y/y. (…)
Total hiring increased 2.4% y/y. Hiring in the private sector increased 2.7% y/y led by a 13.5% y/y gain in professional & business services jobs. Factory sector hiring rose 12.7% y/y but construction sector employment declined 11.7% y/y. Leisure & hospitality hiring improved 0.7% y/y while the number of education & health services workers eased 1.8% y/y. Hiring in the public sector declined 2.4% y/y. (…)
- Record number of openings, sharply accelerating, but flat hirings.
- Businesses can’t find unemployeds with proper skills. Either they train, or they poach. Wage growth for job switchers was 4.4% in March while job stayers’ was +2.7% with the gap widening rapidly. Switchers’ gains are now in line with 2007 when inflation hit 4.3% in October.
- Naturally, this is triggering more quits,
- Quits are particularly stronger in Manufacturing and Professional and Business Services.
On labor costs, the writing is on the wall. Can revenue growth keep offsetting it much longer?
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If you are an export manufacturer, a new headwind just happened (Bespoke):
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While financing costs are on the rise. The start of each rate hike cycle tends to coincide with the unemployment rate falling below NAIRU in about a third of US states. (The Daily Shot)
Source: Deutsche Bank Research
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UPS and Teamsters Discuss Two-Tier Wages, Sunday Deliveries UPS and the Teamsters are discussing a two-tier wage system that would allow the company to hire lower-paid workers to deliver packages on weekends as the parcel giant seeks ways to manage the surge in e-commerce.
The proposal, raised in recent contract negotiations, calls for creating a “hybrid driver” position that would earn as little as $15 an hour and top out at an hourly wage of $30. These employees’ regular schedule would be Sunday to Thursday or Tuesday to Saturday, avoiding costly overtime.
Under the current contract, most package-truck drivers work Monday to Friday shifts and earn higher wages on weekends. The union says they are entitled to double-time wages in some areas for working on a Sunday, or hourly rates of nearly $74. (…)
Trump’s Iran Sanctions Put Oil Buyers in a Bind Washington’s decision to reinstate Iranian sanctions threatens to slowly cut off a chunk of the world’s crude supply—a shift that could redraw global supply lines and require Iran’s big customers to find alternative sources.
(…) In an effort to limit short-term pressure on prices, the U.S. said buyers will have until November to stop shipments, and Washington held out the prospect of exemptions for countries that reduced their Iranian purchases significantly, without providing specifics.
Treasury Secretary Steven Mnuchin said Tuesday the U.S. negotiated ahead of time with oil-producing allies to boost output and keep prices in check. Saudi Arabia, a longtime regional rival of Iran and a fierce competitor for global oil market share, said late Tuesday it was ready to step in to stabilize markets.
Still, some big global buyers will need to find new supplies. Iranian oil exports amounted to about 2.7 million barrels a day in April, or almost 3% of global demand.
While no U.S. entities buy Iranian crude, Washington’s sanctions would extend to foreign firms that do, if they conduct significant dollar transactions, use U.S. banks, or have other business in the U.S. (…)
Moscow, under its own set of Western sanctions, started buying 100,000 barrels a day of Iranian oil in exchange for equipment and goods, according to Russian and Iranian officials. Russia refines the Iranian crude and re-exports the refined products.
From NBF:
(…) should new sanctions force Iran to return to 2015 levels of oil production, i.e. a supply cut of 1 million bpd from current levels, the world’s excess demand would rise to about 1.5 million bpd, the largest since 2007.
The big producers appear pretty maxed out. U.S. production growth has come from shale but shale pipeline capacity is also maxed out so shale production could flatten pretty soon.
EARNINGS WATCH
417 S&P 500 companies have reported. The beat rate holds at 79% with a +6.6% surprise factor (+1.4% on revenues). Blended EPS seen up 25.6% in Q1 (23.7% ex-Energy).
Trailing EPS have just crossed $140 (almost $147 tax reform normalized) and are now seen reaching $160 for the year.