| | | | | | | Presented By Northern Trust | | | | Axios Markets | | By Aja Whitaker-Moore ·Jun 16, 2021 | | 🐪Good morning. (Today's Smart Brevity count: 1,362 words, 5 minutes.) Send tips, or feedback to aja.moore@axios.com or write to me on Twitter @AjaWMoore. | | | | | | 1 big thing: Burnt-out America |  | | | Illustration: Sarah Grillo/Axios | | | | Many politicians, pundits and business owners have said pandemic-era enhanced unemployment benefits are keeping would-be workers at home. But that's a much too simplistic explanation of today's employment situation, writes Axios' Hope King. The big picture: Many hard-hit sectors are rebounding faster than anecdotal evidence would suggest. And when jobs are hard to fill, a broader worker awakening over the past year is part of the reason. Why it matters: Blaming the jobs surplus on the supplemental unemployment support reduces labor to no more than an equation of wages and output. It ignores the full worker experience and all the factors that make it less appealing to return to certain jobs. State of play: The hardest-hit areas of the COVID economy are seeing workers come back. - Yes, but: Those are some of the same areas where voluntary departure rates are also at record highs and where hiring isn't keeping pace with job creation.
- The largest increases in job openings in April were in food and accommodation services, up 349,000, while hiring was up 232,000. But the sector also saw a record 5.6% of workers quit in April up from 5.4% in March.
- Meanwhile: Despite anecdotal tales of woe, the leisure and hospitality space in May reported the most new jobs created of any sector, at 292,000. Two-thirds came from food and drink establishments.
What they're saying: "It's not just money, sitting on both sides of the scale," Melissa Swift, global leader of workforce transformation at consulting firm Korn Ferry, tells Axios. - "We basically burned out the global workforce over the last year. One of the ways people deal with burnout is switching employers," Swift adds.
By the numbers: More than 4 in 10 workers say they're considering leaving their jobs, according to a study by Microsoft, while Pew has found that 66% of unemployed Americans have seriously considered changing their occupation. - A record high of 4 million people (2.7% rate) quit their jobs in April, with the largest in retail (106,000) and professional business services (94,000).
Quick take: Analysts at Morgan Stanley wrote in a report this month that supplemental government benefits "are likely no more of a factor than other impediments to workplace re-entry." - The analysts cited the Federal Reserve's latest Beige Book (a snapshot of economic conditions in Fed districts), in which child care, transportation and health care were widely cited in addition to unemployment benefits as holding back potential workers.
The bottom line: Workers across sectors and income classes realize they are now more empowered than ever, as Axios chief financial correspondent Felix Salmon recently wrote. Go deeper. |     | | | | | | 2. Catch up quick | | The World Bank estimates that global growth will hit 5.6% this year, an upgrade from its 4.1% forecast in January. It would be the fastest year of growth since 1973. (AP) A Deutsche Bank trader's $100 million bet on a formerly distressed container shipping company could make the bank $1 billion — or a quarter of its investment banking profit in 2020. (Bloomberg) New home construction has fallen to historic lows, prompting an industry group to call for a "once-in-a-generation" government response. (WSJ) | | | | | | | | 3. New FTC chair already rocking boats |  | | | Photo: Saul Loeb/Getty Images | | | | By appointing tech critic Lina Khan to chair the Federal Trade Commission Tuesday, the White House made clear that the Biden administration is dead serious about antitrust enforcement and other measures to rein in Google, Facebook, Apple and Amazon, writes Axios' Ashley Gold and Margaret Harding McGill. The intrigue: By naming Khan FTC chair just hours after the Senate confirmed her appointment as one of five commissioners at the agency, the White House took both the industry and many D.C. insiders by surprise. Why it matters: Specific moves to clip the wings of tech giants over issues like monopolistic behavior and privacy practices are more likely to come from leadership at the FTC and the Department of Justice than from Congress. - The FTC is widely seen as the likeliest leading edge of any major regulatory moves.
- Putting a firebrand like Khan in the FTC's driver seat will rally tech's opponents and provoke some late-night counter-strategy sessions in Silicon Valley offices.
Khan, 32, is a Columbia Law professor known for her argument that Amazon's retail business should be separated from its selling platform and for advocating broad updates of antitrust law to deal with digital-age problems. Our thought bubble, from Axios' Felix Salmon: This is a prime example of how Biden is governing much further to the left than progressives ever dared to dream during the presidential primary. Khan's "hipster antitrust" was a fringe idea just a year ago; now she's going to be in charge of the FTC. The bottom line: If Khan pursues a wide-ranging regulatory agenda, as she is expected to, and quickly gets another Democratic commissioner confirmed, the FTC can move to pursue aggressive cases and enforcement, especially with the support of Congress. Go deeper. | | | | | | | | A message from Northern Trust | | How to navigate possible tax policy changes | | |  | | | | There is much uncertainty and speculation surrounding the ultimate form of tax policy changes announced by the Biden Administration. Gain insight at the intersection of changing tax policy and managing complex wealth from The Northern Trust Institute. Ready for reform? | | | | | | 4. A silver lining for retail sales |  Data: Census; Chart: Danielle Alberti/Axios Retail sales in May fell at a greater rate than what economists predicted. But a closer look reveals a somewhat encouraging economic snapshot, Axios' Markets correspondent Sam Ro writes. Why it matters: Consumer spending accounts for about 68% of GDP. So, the trajectory of retail sales acts as a rough proxy for the direction of the economy. By the numbers: According to the Census Bureau, total retail sales fell by 1.3% month over month in May, which was slightly worse than the 0.8% decline estimated by economists. Yes, but: The prior two month's numbers were revised up significantly. April retail sales actually grew 0.9% month over month, a big change from an initial print that showed no growth. Between the lines: Examining the makeup of the numbers reflects an economy going through a ton of change as consumers emerge from their homes and do stuff. - Clothing sales were up 3%. Sales at restaurants and bars were up 1.8%.
- Meanwhile, durable goods that don't leave the house — furniture, electronics, appliances, building materials — saw sales declines.
The intrigue: The economic shutdown of 2020 and the subsequent reopening are unprecedented, making it incredibly difficult to get a good measurement of the economy as it regains its legs. - This is reflected by the substantial revisions to the historical retail sales figures. Economists face similar challenges in their forecasts.
The bottom line: Monthly readings on consumer behavior will remain very noisy as the effects of stimulus checks wear off and the growing population of vaccinated Americans shifts its spending patterns. But longer-term trends point to robust retail activity. | | | | | | | | 5. Homebuilding's knock-on effects |  New details on the epic disruption facing homebuilders emerged Tuesday, as a key sentiment index reached a 10-month low, writes Axios' Kate Marino. Why it matters: Homebuilders are passing along their higher materials costs to customers, increasingly pushing home prices out of reach for some aspiring buyers. What's new: The National Association of Homebuilders/Wells Fargo Housing Market Index, which tracks builders' sentiment, dropped 2 points to 81 versus consensus for a reading of 83. - "Higher costs and declining availability for softwood lumber and other building materials pushed down builder sentiment in June," says NAHB chairman Chuck Fowke.
- "These higher costs have moved some new homes beyond the budget of prospective buyers, which has slowed the strong pace of home building."
Go deeper: The impact of the supply problems is spreading to home finance. - Appraisals aren't keeping up with homes' rising market prices, which leads to trouble getting mortgages and construction loans, says NAHB chief economist Robert Dietz.
Fowke called on Washington to lend a hand. "Policymakers need to focus on supply-chain issues in order to allow the economic recovery to continue," he wrote in his statement. Context: The latest NAHB index reading is still high by historical standards — anything above 50 is considered positive — but it's a notable shift from a record peak of 90 in November. - Lumber prices have pulled back from their high last month, but are still much more expensive than usual.
What to watch: Housing starts data for May is due out later today, and new home sales data for the month will be released June 23. | | | | | | | | A message from Northern Trust | | State of the state: A relocation checklist | | |  | | | | A move across state lines requires careful planning to avoid unintended tax consequences. Review Northern Trust's checklist before relocating to a different state to understand and prepare for the financial implications of your move. Learn more. | | |  | | The tool and templates you need for more engaging team updates. | | | | | | Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here.
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