If you feel like it has been August forever, you’re not alone. Summers are almost always slow market months, and this year is no different. Eighteen months into the global COVID-19 pandemic, that appears to only be continuing, many individuals are feeling burnt out. With uncertainty surrounding our day-to-day lives, it’s not surprising that many are just hoping to take things day-by-day.
Amid the virus insanity, news that feels to change by the minute, and back-to-school season starting, we’re here to clear up the news you may be hearing about market activity.
Ongoing Labor Shortages
Many retail & food service businesses are struggling to find workers. There are many issues at play here. The government extended unemployment benefits, meaning many individuals who were laid off or had hours reduced during the pandemic are eligible for continued payments. Further, logistics and supply chains are still not functioning at pre-pandemic levels. There are ongoing shortages of certain food items, only made worse by an overall increased level of demand as the population grows.
Wages have risen sharply over the last few months as there has been a higher demand for workers and a smaller supply. The market knows what it’s doing. The problem is the government is supplementing workers to get paid more than their job position demands. Once the government ends unemployment benefits in October, many individuals will be forced to return to work.
There are some external forces working against the labor market as well. Some have retired early. The risks with returning to work do not outweigh the benefits of retirement, especially for people who were working because they wanted to. Now, many of the community benefits they received have been taken away and there is no benefit for them to return to work.
It’s also important to consider costs like childcare. The high cost of care and ability to work from home have deterred some from returning to an in-office job, rather opting to wait until they can find a work-from-home job that allows them to avoid high child care costs.
For small businesses, offering wages that are competitive with unemployment checks and benefits individuals now expect can be intimidating. Businesses need to leverage technology and outsourcing when possible. However, if you need more workers, you should be able to absorb some of the cost of increased wages, or your business wasn’t running efficiently enough to keep the doors open in the first place. While this may be a harsh reality for some, there clearly may not have been enough demand for your business.
As an individual looking for work, now is an excellent time to invest in yourself and increase your skillset. You may find lucrative employment opportunities in new fields. Take advantage of this opportunity to explore those.
Organizations Excelling During the Pandemic
Companies have shown incredible results in their Q2 earnings. Certain companies that have seen high earnings growth rates have been able to maximize their opportunity in light of this global pandemic and adopt a changing business model. They will continue to increase their revenues quarter over quarter.
If your organization has not adapted to the changing business landscape, you’ll likely continue to lag behind. Before it’s too late, explore how you can embrace the move toward total digital transformation.
Understanding the US’s Withdrawal from Afghanistan
More than likely, there will not be significant market impacts as a result of the United State’s withdrawal from Afghanistan and the associated Taliban takeover. Markets have continued to rise throughout the entire event. The fallout, however, could create uncertainty rooted in a lack of trust in the Biden administration to do the “right thing” and could hint at upcoming market volatility due to the lack of trust in the government.
Interpreting August Market Movements
We’re coming to the end of the market’s slowest season. Before we know it, Black Friday will be here, then the holidays, and it will suddenly be 2022. Don’t let recent news pull you off track. Continue to weather the storm and stick to your path.Follow us on LinkedIn to keep up with all of our market updates, educational resources, and more.