The Fed hiked a quarter point today to bring the Fed funds rate to 4.5% to 4.75% and Powell mentioned that goods inflation was coming down however services inflation is still high and that’s where the JOLTS report comes in from the BLS:
The number of job openings increased to 11.0 million on the last business day of December, the U.S. Bureau of Labor Statistics reported today. Over the month, the number of hires and total separations changed little at 6.2 million and 5.9 million, respectively. Within separations, quits (4.1 million) and layoffs and discharges (1.5 million) changed little. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class.
Job Openings
On the last business day of December, the number and rate of job openings increased to 11.0 million and 6.7 percent, respectively. In December, the largest increases in job openings were in accommodation and food services (+409,000), retail trade (+134,000), and construction (+82,000). The number of job openings decreased in information (-107,000).
This brings up to our third point. We wanted to take a look at social security beneficiaries and do our own projections for how that might impact the labor force in the United States. Here’s a couple of graphs and the data was from the social security administration.
The important line in the graph above is the orange line (aged 65 or older) that shows how many people enroll in social security benefits. In 2018 the number enrolled over 65 was 45.804 million. By 2022 the number increased to 50.604 million. This was an increase of 4.8 million over the age of 65 people enrolling in social security. Let’s take a look at some projections using simple extrapolation in Excel.
If the projections hold there will be 3.2 million more people enrolling in social security by 2026 which is a mere 3 years away. We can expect, on average, at least 1 million people per year leaving the workforce over the next 3 years.
The Fed has its work cut out to prevent massive labor inflation as the labor market gets tighter and tighter. Stay tuned, stay profitable and stay solvent…