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The Wheels on the Bus Go ‘Round and ‘Round
Public transit is hitting a speed bump: not enough drivers. A historically low unemployment rate combined with a wave of retiring baby boomer operators has left transit agencies understaffed. Officials say they’ll frequently recruit and train new drivers only to see them jump to jobs with better hours or higher pay at private bus or trucking companies. The shortage has forced agencies to mandate overtime and cancel scheduled trips, frustrating employees and customers and hindering local governments’ efforts to promote transit as a reliable alternative to driving, David Harrison reports.
Case study: For more than a decade, Denver has been on a public-transit expansion spree that so far has added 66 miles of new rail lines, 18 miles of new bus routes and 43 new stations. But now the system is considering cuts that would affect more than two dozen bus and four light-rail routes starting in May.
WHAT TO WATCH TODAY
U.S. nonfarm payrolls for January are expected to increase by 158,000 from the prior month and the unemployment rate is expected to hold steady at 3.5%. (8:30 a.m. ET)
U.S. wholesale inventories for December are expected to fall 0.1% from the prior month. (10 a.m. ET)
The Federal Reserve releases its semi-annual monetary policy report to Congress at 11 a.m. ET.
The Baker Hughes rig count is out at 1 p.m. ET.
U.S. consumer credit is out at 3 p.m. ET.
TOP STORIES
Now Hiring
The Labor Department releases its January employment report this morning. Economists are forecasting a gain of 158,000 jobs and an unemployment rate steady at 3.5%. Here are some numbers to watch:
A record-long streak of job creation has the labor market looking better than it has in decades. In December, the broadest measure of unemployment fell to the lowest level on record, suggesting that people who are looking for a full-time job are having more success in finding one. And the share of workers age 25 to 54—years when school and retirement aren’t typically a factor—with a job rose to the highest level since 2001. Can employers keep pulling more workers off the sidelines?
Under the hood, there could be some soft spots. Annual benchmark revisions are expected to show employers added about half-a-million fewer jobs than initially estimated from April 2018 to March 2019. The bigger question: What do those revisions mean for the rest of the year? “We suspect that job growth between April and December could be revised down by an average of around 17,000/month based on our related research,” says J.P. Morgan economist Daniel Silver. Big downward revisions could signal less labor market momentum heading into 2020.
Wage growth and weekly hours also stalled out at the end of 2019. A deceleration in pay gains could hold back consumer spending, a key ingredient in economic growth, but also suggests inflationary pressures remain at bay.
Downside Risks
Treasury Secretary Steven Mnuchin said U.S. officials have reduced their expectations for economic growth in 2020 because of disruptions caused by the grounding of Boeing’s 737 MAX. In an interview with Fox Business, Mr. Mnuchin said gross domestic product growth may be lower than 3% this year. “Boeing has had a big impact on our exports, being our largest exporter,” Mr. Mnuchin said. “I think that could be 50 basis points if not more.” Boeing halted production of its troubled 737 MAX jet last month after it was grounded by regulators following two fatal crashes, Kate Davidson reports.
(To be sure, full-year growth hasn’t hit 3% since 2005 and private-sector forecasters weren’t expecting it to in 2020, with or without Boeing.)
Coronavirus is another potential hit to growth: Mr. Mnuchin said officials are closely monitoring the situation but hadn’t yet seen major effects on supply chains. “There’s no question that the virus will have some impact on global growth and some impact on the U.S.”
The death toll from the coronavirus outbreak rose to more than 600 and the number of infected cases topped 30,000 in mainland China by the end of Thursday. Japan reported 41 new infections aboard a quarantined cruise liner on Friday. Heard on the Street’s Justin Lahart writes that while economists can’t yet confidently estimate what the actual economic hit will be, they do know from experience how outbreaks feed into the economy and what to watch. Consumer behavior, business and government responses like closing offices or quarantines, and supply disruptions top the list.
Collateral damage: The U.S. oil patch could get squeezed. U.S. benchmark crude prices lost over a fifth of their value and dipped below $50 a barrel amid worries about slumping demand from China. A brief drop on scary headlines wouldn’t put much of dent in producers’ bottom lines, but a sustained fall in prices could be the difference between a modest profit and burning cash sorely needed to service debt, Spencer Jakab writes.
Where Are All the Women CEOs?
Women earn the majority of college degrees and make up roughly half the workforce. Yet they lead just 167 of the country’s top 3,000 companies. For many, the barrier isn’t only a glass ceiling at the very top, but also an invisible wall that sidelines them from the kinds of roles that have been traditional stepping stones to the CEO position. A Wall Street Journal study shows that men on the way up overwhelmingly get the management jobs in which a company’s profits and losses hang in the balance. So-called line roles, such as heading a division, unit or brand, are what set executives on the CEO track. Women promoted into C-suites—the “chief” jobs in companies—on the other hand, often fill roles such as head of human resources, administration or legal. Though important functions, the jobs are rarely a path to running a company, Vanessa Fuhrmans reports.
WHAT ELSE WE’RE READING
Big-picture economic data looks pretty good. Gross domestic product is growing, there are more and more jobs, stuff like clothes and TVs are abundant and cheap. So why isn’t everyone happy? “More than 120 million middle-skill workers in Europe and the United States experienced declining employment and stagnating wages at a time when the cost of basics rose faster than general inflation. Low-income individuals experienced challenging outcomes in their roles as consumers and savers. Young people have less secure employment, spend more on meeting basic needs, and have just one-third of the average adult wealth compared to two-thirds a generation ago,” the McKinsey Global Institute writes in a new report.
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