Major stock indexes are relatively flat this morning as investors digest improving jobs numbers while keeping watchful eyes on the situation(s) in the Mid East and the dockworkers’ strike.

Right now, the employment situation seems to be steady as openings in August topped expectations and layoffs are on the decline (falling below pre-Covid numbers). Does this mean those available jobs will be filled?  There is one issue that concerns me … and that is where the openings exist.

According to Daily Shot, construction is the top areas where there is need for workers.

Why is this a worry?

The devastation brought on by Hurricane Helene is still being uncovered, but it doesn’t take much to realize the rebuilding will take an incredible amount of time and manpower … and if there is already a need for construction workers … this has just been substantially increased.

On top of this, we have the dockworkers’ strike.

That should not be an issue over the short term … as Daily Shot reports many companies built up inventory in anticipation … but what then?

Goldman Sachs put some numbers on this:

25% of total U.S. imports arrive through affected ports.
27% of exports leave through affected ports.
Combine these and it adds up to just under 5% of U.S. GDP.
The head of the union says he is “… not playing games” … and one of the union’s concerns is the increasing use of automation.

Will prices go up as supply is constrained?  Will this boost inflation, causing the Fed to delay its plans to further cut rates?

Stay tuned

… it might turn out to be a very cold winter.

Have a great day,

Joseph G. Witthohn, CFA

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