Job openings remain near a record, and more workers quit than ever.
Government data for November shows the continuing disruption of the coronavirus in the labor market.
Businesses in Rehoboth Beach, Del., advertised for workers last month.Credit…Stefani Reynolds for The New York Times
Companies didn’t have quite as much trouble finding employees in November, but workers still had leverage — and they continued to take advantage of it.
There were 10.6 million job openings posted on the last day of November, the Labor Department said Tuesday. That was down from 11.1 million in October, but still more than in any month before the pandemic began.
The number of Americans voluntarily quitting their jobs — whether to take another position or to take some time off work — rose to 4.5 million, a record high. With job openings still high and labor scarce, particularly in the service sector, many workers have been taking advantage of the opportunity to look for jobs with better pay or working conditions.
“Employer demand is still extremely high, and the result of that is increased competition for workers,” said Daniel Zhao, senior economist at the career site Glassdoor. “That means more job openings, higher wages and more churn in the labor market.”
Competition for workers has led to faster wage growth this year, particularly for those changing jobs. Hourly wages for job switchers were up 4.3 percent in November on average, compared to a 3.2 percent gain for people who stayed in their jobs, according to data from the Federal Reserve Bank of Atlanta.
The data released Tuesday is from the Labor Department’s survey of job openings and labor turnover, known as JOLTS. On Friday, the department will release data from December on employment, unemployment and earnings, which most forecasters expect to show that job growth accelerated at the end of the year.
The data in both reports, however, predates the recent explosion of coronavirus cases across the country. The latest Covid-19 wave, linked to the Omicron variant of the virus, has forced airlines to cancel flights, businesses to delay return-to-office plans and school districts to return temporarily to remote learning. How that will affect the broader economy, Mr. Zhao said, remains unclear.
“The data that we’re getting now isn’t fully capturing the impact of Omicron,” he said.
Officials from OPEC, Russia and other oil producers agreed on Tuesday to continue their program of gradual monthly output increases in February, but there are growing doubts about whether they can deliver on the additional barrels. The decision to increase production by 400,000 barrels a day was conveyed in a terse news release from OPEC.
A persistent failure to step up production by the amounts agreed on in July is helping to keep oil prices relatively high even though a surge in coronavirus cases from the Omicron variant threatens to dampen economic activity and oil demand.
The slow ramp up in production also could lead to tension with the Biden administration, which wants the producers to pump more oil in an effort to lower gasoline prices in the United States. Gas prices, nationally at $3.28 a gallon, are now about one-third higher than they were a year ago, according to the Energy Information Administration, a government agency, and contributing to rising inflation.What Saudi Arabia decides to do is crucial. The only route to meeting the scheduled increases in output would be for Saudi Arabia, which now has most of the world’s extra capacity, to agree to produce more than its quota.
From an oil industry perspective, Saudi Arabia, the leader of the Organization of the Petroleum Exporting Countries, has weathered the pandemic better than might have been expected. Saudi production is back around the 10-million-barrel-a-day level that the kingdom prefers, prices are relatively high, and Riyadh’s influence over oil policy is strong.
In November, the White House coordinated a planned release of strategic oil reserves with other nations in an effort to dampen the market, but prices have since edged up to more than $79 a barrel for Brent crude, the international benchmark, and $76 a barrel for West Texas Intermediate, the American standard.
In the spring of 2020, the early days of the pandemic, the oil producers group known as OPEC Plus sharply curbed production by almost 10 million barrels a day, or almost 10 percent of world supply at the time.
Building output back up again has not been easy for several countries, including Nigeria and Angola.
In its December Monthly Oil Report, the International Energy Agency estimated that OPEC Plus fell short of its November target by 650,000 barrels a day, substantially more than the 400,000 barrels a day the group had planned to increase each month.
A few producers, including Saudi Arabia and Iraq, are increasing output handily, but others in the 23-member group are lagging. A range of issues, including political strife and underinvestment in drilling, are holding them back.
Even Russia, the group’s second-largest exporter after Saudi Arabia, appears to have hit a wall at about 9.9 million barrels a day, about 600,000 less than it pumped in April 2020 before the big cuts. For Russia to increase substantially from here will require improved tax policies and the development of new fields, analysts say.
“Russia is temporarily near its limits,” said Bhushan Bahree, an executive director at IHS Markit, a research firm.
Nigeria, Africa’s largest producer, in November pumped 360,000 barrels a day below its quota — almost enough on its own to wipe out the agreed 400,000-barrel-a-day monthly increase for the overall group. “A poor regulatory framework, sabotage and vandalization of oil facilities” are deterring needed spending in Nigeria, the International Energy Agency said in its report.
Angola, another African country, is also pumping well under its quota, while Libyan production has recently fallen off rapidly because of political turmoil.
Wages are rising at their fastest pace in years, but prices are rising even faster.
Americans have noticed.
Only 17 percent of workers say they have received raises that kept up with inflation over the past year, according to a survey of 5,365 adults conducted last month for The New York Times by Momentive, the online research firm formerly known as SurveyMonkey. Most of the rest say either that they have received raises that lagged price increases or that they have received no raise at all; 8 percent of respondents said they had taken a pay cut.
Nearly nine in 10 Americans say they are at least “somewhat concerned” about inflation, and six in 10 are “very concerned.” Worries about inflation cross generational, racial and even partisan lines: 95 percent of Republicans, 88 percent of independents and 82 percent of Democrats say they are concerned.
Government data shows that wage gains are outpacing inflation in some corners of the economy, particularly the service sector, where competition for workers has driven rapid increases in pay. But in the aggregate, prices have risen faster than pay in recent months: The Consumer Price Index rose 6.8 percent in November, a nearly four-decade high; average hourly earnings rose 4.8 percent in November, and other measures likewise show pay gains lagging price increases.
Worries about inflation are dragging down overall confidence in the economy, which is at the lowest level in the nearly five years Momentive has been conducting its survey. Republicans have been particularly pessimistic about the economy since President Biden took office a year ago, but in recent months, Democrats too have become more dour.
“Pretty much the only group of people who say they’re better of now than they were a year ago are people who’ve gotten a pay raise that matches or beats inflation,” said Laura Wronski, a research scientist at Momentive.
Despite their concerns, however, most Americans said inflation had not yet had a major effect on their finances — although low-income households reported having a harder time dealing with rising prices than other groups. And only 11 percent said they planned to ask for a raise if inflation continued. That could be comforting to officials at the Federal Reserve, who are watching warily for evidence of a “wage-price spiral,” in which rising prices lead workers to demand raises, leading employers to raise prices to pay for them.
Elizabeth Holmes, the founder of the failed blood testing start-up Theranos, was found guilty of four of 11 charges of fraud on Monday.
Ms. Holmes, 37, was the most prominent tech executive to field fraud accusations in a generation of high-flying, money-losing start-ups. A jury of eight men and four women took 50 hours to reach a verdict, convicting her of three counts of wire fraud and one count of conspiracy to commit wire fraud, The New York Times’s Erin Griffiths and Erin Woo report.
She was found not guilty on four other counts. The jury was unable to reach a verdict on three counts, which were set aside for later. Each count carries a maximum sentence of 20 years in prison, terms that are likely to be served concurrently. Ms. Holmes is expected to appeal.
After the verdict was read, defense and prosecution lawyers discussed plans for Ms. Holmes’s sentencing, the status of her probation and the fate of the three hung charges. Judge Edward J. Davila of the Northern District of California, who oversaw the case, said he planned to declare a mistrial on those charges, which the government could choose to retry.
The parties agreed that Ms. Holmes would not be taken into custody on Monday and Ms. Holmes left the San Jose, Calif. courtroom through a side door.
The verdict stands out for its rarity. Few technology executives are charged with fraud and even fewer are convicted. If sentenced to prison, Ms. Holmes would be the most notable female executive to serve time since Martha Stewart did in 2004 after lying to investigators about a stock sale.
The case against Ms. Holmes came to symbolize the pitfalls of Silicon Valley’s culture of hustle and hype. READ MORE
Elizabeth Holmes, the founder of the blood testing start-up Theranos, faced 11 counts of fraud for lying to investors, patients and others to raise money and the profile for her company. (An additional charge of wire fraud against a patient was dropped during the trial.)
Here’s what jurors decided:
Count one of conspiring to commit wire fraud against investors in Theranos between 2010 and 2015: Guilty.
Count two of conspiring to commit wire fraud against patients who paid for Theranos’s blood testing services between 2013 and 2016: Not guilty.
Count three of wire fraud in connection with a wire transfer of $99,990 on or about Dec. 30, 2013: No verdict.
Count four of wire fraud in connection with a wire transfer of $5,349,900 on or about Dec. 31, 2013: No verdict.
Count five of wire fraud in connection with a wire transfer of $4,875,000 on or about Dec. 31, 2013: No verdict.
Count six of wire fraud in connection with a wire transfer of $38,336,632 on or about Feb. 6, 2014: Guilty.
Count seven of wire fraud in connection with a wire transfer of $99,999,984 on or about Oct. 31, 2014:Guilty.
Count eight of wire fraud in connection with a wire transfer of $5,999,997 on or about Oct. 31, 2014: Guilty.
Count nine was dropped.
Count 10 of wire fraud in connection with a patient’s laboratory blood test results on or about May 11, 2015: Not guilty.
Count 11 of wire fraud in connection with a patient’s laboratory blood test results on or about May 16, 2015: Not guilty.
Count 12 of wire fraud in connection with a wire transfer of $1,126,661 on or about Aug. 3, 2015: Not guilty.
U.S. stocks rose on Tuesday ahead of the release of data on job openings in November, a period employers were still struggling to fill positions. The S&P 500 was up about 0.4 percent, while the Nasdaq was little changed.
The Labor Department is set to publish on Tuesday its latest report on job openings and the number of Americans quitting their jobs. Investors will look over a snapshot of the labor market in November, a period before the Omicron variant was in full swing in the U.S. In October, the report showed that 4.2 million people quit their jobs, a decline of about 205,000 from September, while job openings rose 431,000 to 11 million.
Oil prices rose on Tuesday as officials from OPEC, Russia and other oil producers agreed to continue their program of gradual monthly output increases, increasing production each month by 400,000 barrels a day. West Texas Intermediate, the U.S. crude benchmark, was up 0.6 percent to $76.56 a barrel.
Economists will also be watching tomorrow’s release of minutes from the Federal Reserve’s December meeting, which could signal how quickly central bank officials expect to start raising interest rates. Rate increases are broadly expected this year as officials try to bring inflation under control, and many investors anticipate that they could begin as soon as March.
Fed policymakers signaled in December that they could raise interest rates three times in 2022, and the minutes could provide details on what economic evidence officials will be parsing as they decide whether to stick with that pace, slow it down or speed it up.
Yields on 10-year U.S. Treasury notes climbed to 1.67 percent from 1.63 percent on Tuesday as investors sold some of their safer assets.
In Europe, stock indexes rallied, with the Stoxx Europe 600 up 1.1 percent.
The tools presented to combat the coronavirus crisis have often led to political strife and aggravated existing divides. First it was masks, then vaccines and now tests. As the Biden administration pushes to help keep the economy open despite a surge in cases, coronavirus tests will play an increasingly important role.
For businesses, this presents a new set of challenges, the DealBook newsletter reports:
Accuracy: Some public health officials have suggested that rapid tests are not terribly effective at diagnosing infectiousness. These tests may not always identify infections in their earliest days, but they can flag people who have high viral loads and are thus most likely to be transmitting the virus.
Supply: The Biden administration has promised 500 million more tests, but that may take time to fulfill. This might not be a problem for big companies, which have been stockpiling tests, but might be for smaller firms trying to get workers back in offices. Ron Hsu of Lazy Betty, a restaurant in Atlanta, said he spent $800 on tests when one of his employees tested positive for the virus.
Logistics: Will companies monitor employees taking tests or adopt the honor code? How will they record and track the results? Who will pay for all this?
Politics: Amid testing shortages in Florida, the state’s surgeon general said he wanted to “unwind” the “testing psychology.” The declaration was criticized by medical experts but foreshadows more political clashes over how to manage the virus, particularly given high numbers of mild or asymptomatic cases produced by the Omicron variant.
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Credit Suisse will lay off 69 employees in New York in the wake of $5.5 billion in losses from the collapse of Archegos Capital Management, the family office of the former Tiger Management trader Bill Hwang.
The Swiss bank is cutting jobs because it will close its U.S. prime services division by Aug. 1, according to a filing with the state’s Department of Labor. The layoffs will be effective March 6, just under a year after the sudden collapse of Archegos reverberated through some of Wall Street’s biggest banks. Credit Suisse announced in November that it would shutter most of its prime brokerage businesses, in which it acts as a large lender to trading firms including hedge funds like Archegos.
A spokeswoman for the bank declined to comment.
The collapse of Archegos caused losses at a number of big banks but was particularly painful for Credit Suisse, which was slower than other creditors to liquidate the fund’s positions. Credit Suisse undertook a major management shake-up in the immediate aftermath, and a report by a law firm hired by the bank’s board faulted a “fundamental failure of management and controls.”
Jeanna Smialek contributed reporting.
Protesters gathered outside China Evergrande offices in Guangzhou on Tuesday to demand that the indebted real estate developer give them their money back, as the company’s sales across China continued to plunge. Last spring, Evergrande turned to many of its employees and their family members for money that it packaged as high-interest loans as part of its wealth-management unit. Some of those investors and employees gathered on Tuesday morning outside Evergrande offices in Guangzhou to demand repayment.
Verizon and AT&T said late Monday that they had agreed to delay their deployment of new wireless technology for two weeks, giving in to the demands of federal aviation regulators who have raised concerns that the signals could create an airline safety hazard. The companies made the decision after initially rebuffing a request for a delay made last week by Transportation Secretary Pete Buttigieg and Steve Dickson, the head of the Federal Aviation Administration.
Apple‘s market value touched the $3 trillion level on Monday, making the tech giant the first publicly traded company ever to reach that milepost. Apple now accounts for nearly 7 percent of the total value of the S&P 500. The shares fell off that level later in the day.
Facebook on Monday suspended for 24 hours the account of Representative Marjorie Taylor Greene for spreading misinformation about the coronavirus, a day after Twitter permanently banned one of her accounts for posting a similar message. Ms. Greene, a Georgia Republican, had posted falsely about “extremely high amounts of Covid vaccine deaths.”
Airlines canceled more than 8,000 flights in the United States were canceled from Saturday through Monday, affecting more than one in 10 scheduled flights, according to FlightAware, a tracking service. The recent cancellations were caused by storms that produced heavy snowfall in the Midwest over the weekend and over the eastern United States on Monday, the worst day of the holiday season with more than 3,000 canceled flights. Southwest Airlines and SkyWest Airlines, which operates regional flights for several major carriers, were responsible for about a third of all cancellations over the weekend and Monday.