Aside from the stock market (about which nothing will be said) the economic news is mostly good, with the ongoing trade war caveat.
U.S. productivity is up, reports AP.
U.S. productivity grew at an annual rate of 2.3% in the July-September quarter, slower than the previous quarter but still an improvement over the weak annual gains of the past decade. Labor costs rose at a modest pace in the third quarter.
U.S. businesses hired new workers at a solid pace in November, adding 179,000 jobs, according to a private survey.
The report comes as other data also suggest the U.S. economy remains healthy, even as the financial markets have gyrated over concerns about a trade conflict with China and slowing global growth.
Payroll processor ADP said Thursday that last month’s job gains slowed from October’s strong showing of 225,000. Still, November’s hiring is enough to lower the unemployment rate over time.
U.S. services firms grew at a slightly stronger pace in November, a sign that the recent stock market sell-offs have yet to dampen enthusiasm among consumers.
The Institute for Supply Management, which is composed of purchasing managers, reports that its services index rose to 60.7 last month, up from 60.3 in October. Readings above 50 point to further expansion Services companies have been expanding for 106 months, or almost nine years.
And small businesses continue hiring in a tight labor market, according to NFIB’s latest survey.
Small business job creation inched up in November, rising to a net addition of 0.19 workers per firm, according to NFIB’s monthly jobs report, released today. Sixteen percent of owners reported increasing employment an average of 2.9 workers per firm, unchanged from October, and 11 percent reported reducing employment an average of 1.9 workers per firm.
The tight labor market is driving up wages, reports the Wall Street Journal.
Proving once again that incentives matter, today’s NFIB survey will also show that company owners struggling to find new talent are responding in exactly the way one would expect. Says [NFIB Chief Economist Bill] Dunkelberg:
The percent of business owners reporting that they increased employee compensation continued at 45 year record high levels… A net 34 percent reported higher compensation in November and a net 25 percent planned increases in the next few months, predicting even more gains in wages and benefits.
Yet, the lack of qualified workers presents a major challenge to employers and a threat to the expansion. From the NFIB jobs report.
“The labor force is not growing quickly enough to satisfy the current demand for workers,” said NFIB Chief Economist Bill Dunkelberg. “A successful hire in this market will likely create a job vacancy elsewhere because of the tight labor market. The unemployment rate will likely go lower since the labor demand is still more than the increases in labor supply.”
That makes programs that accelerate skill development, especially those that lead to a postsecondary credential, so vital to our economic future.