2020 and 2021 were good times for people looking to find a job in Nebraska, but labor shortages now constrain business activity, and inflation is an ongoing challenge, said Nate Kauffman and John McCoy, economists at the Federal Reserve Bank of Kansas City in a publication.
Nebraska’s labor shortages reached all-time highs in 2022, with very low unemployment and rising wages, Kauffman and McCoy said. However, inflationary pressures weighed on households and businesses, and a larger workforce likely will be crucial to sustaining business and economic activity improvements.
EMPLOYMENT
The Nebraska job market took time to recover after the pandemic, but employment since then has approached its pre-pandemic trajectory, the economists said. As of November, Nebraska’s employment was 1.1% higher than at the end of 2019 and within 0.8% of its trend over the previous decade.
Nationally, employment reached its pre-pandemic mark slightly earlier, but remained more than 2% less than what might have been expected had job growth continued at its average pace from 2009 to 2019.
As underlying economic conditions improved through 2022, Nebraska employers attempted to accelerate their hiring, competing for scarce employees, the publication said. Midway through last year, more than four jobs were available per unemployed person, an all-time high.
At the time, that ratio was the highest in the nation, they said. While the ratio has since declined, Nebraska still sat among the highest ratios in the country and more than 64,000 job openings as of October.
LABOR FORCE STILL LACKING
The ability to fill job openings to support business opportunities has been hindered, in part, by a lack of growth in Nebraska’s labor force, the pair said.
From the beginning of 2021 to mid-2022, Nebraska’s labor force expanded by 2.2%. Since then, however, there has been very little additional growth.
As a result, Nebraska layoffs remained low, and employees increasingly left existing jobs to pursue employment elsewhere, the economists said. Quits reached a historic high of 30,000 last spring. The issue became more acute during the pandemic years.
Between 2009 and 2019, Nebraska averaged 18,000 quits and 12,000 layoffs per month, the economists said. In 2021 and 2022, the average number of monthly quits increased to 28,000, and the average number of monthly layoffs dropped to just 9,000.
Personal income was more than 5% higher in Nebraska and the US than what might have been expected when applying growth rates that existed prior to 2020, they said.
Federal stimulus payments spurred short term personal income in 2020 and 2021. Yet consistently faster income growth was supported by strong wage growth amid persistently tight labor markets.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $155.48 to $155.80 per cwt, compared with last week’s range of $156.00 to $158.90. FOB dressed steers, and heifers went for $245.51 to $245.61 per cwt, versus $245.49 to $251.62.
The USDA choice cutout Monday was down $0.28 per cwt at $271.44 while select was off $1.94 at $254.49. The choice/select spread widened to $15.95 from $15.29 with 65 loads of fabricated product and 42 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were down $0.10 to $0.15 at $1.70 to $1.90 a bushel over the Mar corn contract. Bids in Kansas were steady at $0.85 over the Mar, which settled at $6.66 1/4 a bushel, down $0.10.
The CME Feeder Cattle Index for the seven days ended Friday was $177.69 per cwt, up $0.66. This compares with Monday’s Jan contract settlement of $179.17 per cwt, up $1.25, and Mar’s $183.27, up $2.30.