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Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (17728)	5/7/2000 9:36:00 PM
From: Dealer	Read Replies (1) \| Respond to of 35685

Who loves 'ya, baby? (Case for higher interest rates--dealer) Employers do By Dr. Irwin Kellner, CBS MarketWatch.com Last Update: 12:26 PM ET May 5, 2000 Commentary Latest headlines NEW YORK (CBS.MW) -- Who loves you? Besides the ?love bug,? employers do -- if you?re an able-bodied worker with a decent set of skills, or at least, the willingness to learn them. The Labor Department reports that the quit rate in April shot up to its highest level in nearly 10 years. Indeed, show me a company that is not looking for workers and I?ll show you a firm that?s in the process of folding its tent. You can?t open a Web site these days without seeing a ?we?re hiring? icon. Newspapers, for their part, are chock full of help-wanted ads. And now worker-hungry employers are starting to advertise on radio and TV. Taking advantage of the strong labor market, many people are leaving their jobs in search of greener pastures. The Labor Department reports that the quit rate in April shot up to its highest level in nearly 10 years. True, not everyone who wants a job has one. There are some people who are leaving their jobs involuntarily, making them eligible to apply for unemployment benefits. First-time claims for unemployment insurance rose almost 20,000 last week, to 303,000. That?s the fifth time this measure has gone above 300,000 in the past eight months. But these folks aren?t on the street all that long, judging by the low national unemployment rate. April?s rate of 3.9 percent was the lowest in over 30 years. See full story. Hunting for employees Poaching is becoming commonplace. Trade shows, for one, are popular hunting grounds to lure employees from their present positions. Needless to say, some employers have initiated bidding wars in an effort to obtain key personnel. The alternative, according to the Federal Reserve?s latest report of conditions around the country, its so-called ?Beige Book,? is lost business. See full story. Compensation is rising Not surprisingly, wages and salaries are rising. In the first quarter, hourly compensation rose at a seasonally adjusted annual rate of 4.2 percent for all non-farm business. This is faster than the ongoing rise in worker efficiency, which was only 2.4 percent higher. As a consequence, unit labor costs shot up by 1.8 percent in the first quarter after falling during the previous period. See full story. Not even showing up in these figures are signing bonuses that many companies are offering to snare employees. Some firms are also paying a bounty to anyone on their existing staff who refers a future employee. Stock options are also being dangled -- although the market?s recent downward swoop has made this form of compensation somewhat less attractive than it used to be -- especially in so-called ?new economy? companies. To forestall pressures on profits, many firms hiked selling prices at a faster pace in the first quarter than they did in the fourth -- a development that has caught the eyes of the markets, not to say the Fed. So while employers love their employees, they may not like what the Fed is about to dish out. It?s called higher interest rates -- get used to it. Dr. Irwin Kellner, chief economist of CBS MarketWatch, is Weller professor of economics at Hofstra University.