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American workers continued to enjoy a solid-but-not-spectacular job market at small firms in January. More bosses handed out raises, though fewer of them planned to lift compensation in the future. That’s according to the latest monthly employment report from the National Federation of Independent Business, due out later today. NFIB is also debuting a new way to measure the health of the labor market at small U.S. companies. After a sharp increase in the number of small firms raising wages in December, the number rose even a little higher in January. “In January, a seasonally adjusted net 32% reported raising compensation, up 1 point from December,” reports NFIB Chief
Economist Bill Dunkelberg. Such rising labor costs normally trigger inflation concerns, but strong productivity numbers lately bring the hope that people are getting paid more because they are producing more. It’s not inflationary if they earned it! When it comes to the future there are no guarantees. Mr. Dunkelberg adds, “A net 22% (seasonally adjusted) plan to raise compensation in the next three months, down 2 points from December.” Also, underlying the mixed message of this month’s report, while the number of firms raising pay ticked up, the number of firms with open positions declined a bit. There is still a worker shortage in America, but it seems to be
getting less acute. The NFIB economist reports: In January, 31% (seasonally adjusted) of small business owners reported job openings they could not fill in the current period, down 2 points from December. Unfilled job openings remain above the historical average of 24%. Twenty five percent have openings for skilled workers (down 3 points), and 10% have openings for unskilled labor (unchanged).
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