How do Job Openings in the US Lower the Market?

How do Job Openings in the US Lower the Market?

Thursday’s have been especially tricky over the last three weeks. We continue to reveal a stepdown pattern in the S&P 500 and the broader market. Have a look at the Apple (NASDAQ:AAPL) stock chart over the previous month. It peaks on Fridays and then tanks through Wednesday.

Lower highs and lower lows have been the theme of May.

My theory is that positive economic data on Thursday is providing some cover. Jobless claims remain muted in this economy. The problem is that a lot of Americans have dropped out of the workforce over the last year. And it’s going to be very tricky to bring people back to work.

Workers are Staying Away from New Jobs

Right now, the U.S. economy has 500,000 manufacturing job openings. We lack enough drivers to bring food and other supplies across the supply chain.

The latest JOLTS report gives us an indicator of more challenges ahead in reaching full employment and addressing the labor shortage. The number of jobs opens in the United States has now surpassed 8 million.

Companies are trying to do more with less. They’re also trying to increase incentives. Chipotle and McDonald’s have both created programs that would pay managers more than $100,000 a year. Chipotle is even giving away full scholarships to colleges for individuals who enter their restaurant programs.

It remains unclear what factors are keeping workers away from new jobs. It could be the enhanced unemployment pay, it could be the several rounds of stimulus, it could be the ongoing challenge of selling a house and relocating across the country. Or it could be that people simply don’t want to do half of the open jobs in this nation.

Regardless, this remains a challenge. If we don’t start putting people back to work, we’ll continue to pretend that we don’t have a problem once again. The U.S. unemployment rate has always been cooked and doesn’t include millions of Americans who simply stopped looking.

We’ll revisit this trend in the months ahead. I expect that the companies that are successful in hiring avoid these bottlenecks and pass on rising costs to their customers will be the most successful firms in the future. I’ll show you an interesting study tomorrow that supports this thesis.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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