The pressure on wages in the US is evident throughout the latest NFIB report: small business compensation plans rose to their highest since January 1986, up from 26 to 30. The NFIB also reported acute skill shortages: small business reporting ‘few or no qualified applicants’ for jobs rose to a record high in September too.
Record low numbers of small businesses reporting problems with financing costs, suggests there is little monetary policy can do to fix a skills issue.
IT companies should be beneficiaries of the labour shortage. The pressure on all companies to become more efficient, will only grow.
But that is not how it is playing out: the S&P 500 IT index and communication services have fallen again this week, with both underperforming (by a wide margin in the latter case). The spectre of higher inflation – realised or not – will be enough to push growth stocks lower.
Summary
- Small business report record rise in compensation
- And most intense skill shortages yet
- Pressure on S&P 500 IT and communication services
