Opinions

Stocks Slump; Jobs Bump


Trader Patrick Casey works on the floor of the New York Stock Exchange on Thursday.

Trader Patrick Casey works on the floor of the New York Stock Exchange on Thursday.


Photo:

Richard Drew/Associated Press

The owners of large U.S. corporations suffered a depressing Thursday morning amid concerns about the economic future. But the latest National Federation of Independent Business survey, due out later today, suggests that the owners of small firms have hardly ever felt better.

NFIB will report an acceleration of hiring last month and a determination among employers to create more jobs in the future. NFIB chief economist William Dunkelberg reports:

Job creation was solid in November at a net addition of 0.19 workers per firm (including those making no change in employment), up slightly from September and October readings at 0.15.

This fall capital markets have been relatively volatile, driven by concerns about slowing global growth, trade disputes and the potential for higher interest rates. Today’s market declines were fueled at least in part by news of a criminal allegation and arrest that could make it harder for the U.S. and China to strike a trade deal.

Kate O’Keeffe and Stu Woo reported last night:

Canadian authorities in Vancouver have arrested Huawei Technologies Co.’s chief financial officer at the request of the U.S. for alleged violations of Iran sanctions, the latest move by Washington against the Chinese cellular-technology giant.

A spokesman for Canada’s justice department said Meng Wanzhou was arrested in Vancouver on Dec. 1 and is sought for extradition by the U.S. A bail hearing has been tentatively scheduled for Friday, according to the spokesman. Ms. Meng, the daughter of Huawei’s founder, Ren Zhengfei, also serves as the company’s deputy chairwoman.

It’s the latest development in a troubled U.S.-China relationship that has dampened investor enthusiasm all year. But at least as of the end of last month, such concerns haven’t prevented small firms from adding personnel.

What is inhibiting job creation is the chronic problem of this era: America’s worker shortage. Notes Mr. Dunkelberg:

Twenty-five percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (up 2 points), matching the record high reached in August.

Proving once again that incentives matter, today’s NFIB survey will also show that company owners struggling to find new talent are responding in exactly the way one would expect. Says Mr. Dunkelberg:

The percent of business owners reporting that they increased employee compensation continued at 45 year record high levels… A net 34 percent reported higher compensation in November and a net 25 percent planned increases in the next few months, predicting even more gains in wages and benefits.

Beyond small business, Thursday brought more news suggesting that wage increases can continue. Put simply, American workers are earning higher wages by producing more stuff per hour. The Journal’s Eric Morath notes:

The productivity of nonfarm workers, measured as the output of goods and services for each hour on the job, increased at a 2.3% seasonally adjusted annual rate in the third quarter, the Labor Department said Thursday.

Negative economic signals from Wall Street’s capital markets should be taken seriously. So too should the positive signals from Main Street job creators.

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(Teresa Vozzo helps compile Best of the Web.)

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Mr. Freeman is the co-author of “Borrowed Time,” now available from HarperBusiness.





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