The Daily Shot - 7/8/14

From: "The Daily Shot" <thedailyshotletter@xxxxxxxxx>
To: <thedailyshot@xxxxxxxxxxxxx>
Date: Tue, 8 Jul 2014 23:41:03 -0400
Greetings,

 

I'd like to start by discussing the growing skills gap in the US. The
Beveridge Curve, a scatter plot of job openings vs. the unemployment rate,
continues to show a structural shift in US job markets.

 



 

A large part of this shift is the skills mismatch. Companies are
increasingly looking for skilled and experienced workers and are having a
tough time filling those openings. If you are in retail for example, you
will have no problems getting part and full time workers to stock the
shelves in your store or run the cash register. On the other hand finding
someone with the skills to run a store, even a really small one, is becoming
more of a challenge. You'll get dozens of resumes to be sure, but very few
with the right qualifications.

One can see this effect in the small business survey data, as more firms are
having a tough time filling openings. The US has millions of unemployed or
"marginally attached" workers, yet these are not the workers companies want.

 



 

Other examples of the American skills mismatch are shown below.

 

1.      Professional and business services job openings exploding.

 



h/t @TheStalwart 

 

2.      Truckers wanted!



 

 

3.      Small businesses complaining about "quality of labor" - something
that was much less of an issue a year ago.

 



 

Wages for skilled workers will rise faster than the national average as
demand grows. Unfortunately those with limited skills will continue to
struggle with stagnant wages and limited opportunities. The days when
unskilled workers could easily get a well-paying job in construction are not
coming back for some time. Welcome to the New Normal.

  _____  

 

Switching topics, here is the famous dot plot showing the Fed's projection
of the overnight rate at the end of 2015 and 2016. Deutsche Bank added the
names of the FOMC members DB believes are responsible for the forecast.
While Yellen is certainly a dove, there are a number of members even more
dovish. Narayana Kocherlakota (Minneapolis Fed) thinks rates should be at
0.5% by the end of 2016.

 



  _____  

 

The Philly Fed Manufacturing Future Capital Expenditures Index shows steady
expectations of stronger CAPEX spending in manufacturing. Many analysts
remain skeptical.

 

 



  _____  

 

The central banks have done a good job taking volatility out of the
financial markets. The rising US production of crude has taken volatility
out of the energy markets - in spite of the Iraq disruption risks.

 



  _____  

 

And now a big plate of food for thought. This is a copy of the first Wall
Street Journal. Even in 1889 people looked at how stocks traded in Europe as
an indication of US markets' open. Enjoy.

 



 

  _____  

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The Daily Shot - 7/8/14

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