Last week was tech earnings reports – I’m looking for cloud data here. AWS reported lower-than-expected revenue and warned that cloud growth would slow and companywide operating profits in the current quarter could be anywhere from $0 to $4 billion. Analysts had expected operating profits near the high end of that range. Google’s cloud numbers were slightly lower than expected but continuing to grow – although analysts are waiting to see their AI moves.
Job openings soared by 572,000 to 11 million in December, according to the latest Job Openings and Labor Turnover Survey. Despite a steady stream of layoff announcements in the technology sector, there are still more job postings than workers available to fill them. Overall, The unemployment rate hit an ultra-low 3.4%, better than expected and the best since 1953. Average hourly earnings rose 0.3% in January, slowing slightly from December’s upwardly revised 0.4% pace. Over the year through January, hourly earnings are up 4.4%. Tech unemployment is only 1.8% versus 3.4% in the broader economy.
Where are the booms? Leisure and Hospitality and Professional and business services lead the pack. In the January growth of jobs, these were the two top segments. The Washington Post dug into the move from hospitality to professional services. Those restaurant employees didn’t disappear – they became office workers.
And one other item of note – the Federal Reserve no longer sees the pandemic as a risk to the economy anymore.
Why do we care?
This is the counter story to the tech layoffs one. Big tech companies believed the economy would move faster than it did and the pandemic conditions would remain indefinitely. They’re trimming up their businesses… in a world without enough workers, and tech remains explicitly tight. For those in services, remember that your customers are distinctly not tech, so those data points matter significantly more. There’s continuing good news in the larger economy.