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As discussed previously on this blog, there is significant uncertainty for businesses, as we move into new phases of dealing with COVID. Along with a longer-term question around a possible automation boom, there are significant shorter term questions raised by economic signs not seen in decades.
One of starkest issues is the continued rising inflation rates with the number rising 5.4% and staying at a 30-year high. This rise is likely to last well into next year. However, while high inflation tends to raise concerns, it also comes with an interesting effect of helping to increase retail sales.
As inflation has increased, retail sales also increased last month, a good sign for business in the COVID recovery, but the spike is only partially due to increased spending with the increase in prices inevitably contributing as well. This can confuse the issue for business, as they evaluate their economic recovery.
Another rarely seen trend has been the record number of individuals quitting their jobs, with 4.3 million workers doing so in August. The food and retail industries were the hardest hit. The large number raises many questions about what is causing the trend and how long it will last. There are a number of ideas about the cause with all of them likely contributing. These include workers feeling confident they can find other, higher paying jobs, or jobs offering better opportunities. In some cases, this means greater flexibility, another potential factor, as people’s lives adjusted greatly during the pandemic, with the ability to have more control over one’s time seeming to be one of the few benefits to COVID lockdowns.
It is worth noting one factor that has not impacted employment as thought, which is the end of increased employment benefits. It was believed that these benefits were keeping people from returning to work; however, this has proven not to be the case. The employment numbers in states that removed the increased employment benefits did not see any measurable gain compared to states that did not remove the benefits, or removed them later.
All together these factors confuse the questions for businesses going forward, including what kind of recovery they will see in sales and profits and whether they will be dealing with increased turnover with employees and hiring issues.
With the constant changes that can impact a business, an experienced legal team can help navigate a difficult time for businesses, particularly with the ever-changing landscape for companies during the current crisis.