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Sunday, July 5, 2009

The Work Week: The Most Troubling New Trend

The most troubling part of the June jobs report was likely not even the lost jobs (467000) but the average work week.

In June, the average workweek for production and non supervisory workers on private non farm payrolls fell by 0.1 hour to 33.0 hours--the lowest level on record for the series, which began in 1964. The manufacturing work week rose by 0.1 hour to 39.5 hours, and factory overtime was unchanged at 2.8 hours.

It's important to note that the average work week measures only those that do have a job. June was the second month in a row in which the average work week dropped. Furthermore, it continues to break records for the shortest work week on record.

Most folks say that employment is a "lagging" indicator. After all, the theory goes that employers wait until they are sure there is a recovery before they begin hiring again. What do you say about employers cutting back on the number of hour of their current employers? Here's how money manager Richard Bernstein explains it.

This is generally considered a leading indicator because employers will tend to adjust the number of hours their employees work before hiring or firing them. For example, it would be normal for companies to begin to pay existing workers overtime before they hire additional workers because of the uncertainty related to the initial upturn in a production or service cycle.


What has been happening to the length of the work week? It has hit all-time lows the last two months. That’s right. The only official leading indicator in the employment report has hit all-time lows the last two months.

Now, the work week is the shortest on record since it became a statistic in 1964. Now, this is NOT a political problem. As Bernstein points out, no commentators are talking about it. It is, however, an economic problem.

That ultimately makes it a political problem. Weakness in the economy is at a tipping point. Things are NOT getting better. If you don't believe that jobs are a leading indicator, then believe the work week.

1 comment:

Anonymous said...

Promoting green-paper deficits at the extraordinary rate of $trillions per month since January, our current malfeasant administration engages an unprecedented vote-buying spree that by end-2010 will drive inflation above Jimmy Carter's 20%, raise unemployment to Depression levels. How does $10/gal. gas sound when you've been jobless over eighteen months?

In the face of an impending 70-year Maunder Minimum "cold shock," which may even end the current Holocene Interglacial Epoch, extreme-left partisans in Congress have willfully declared war on America's energy economy: No nuclear plants, no oil drilling, ban coal-mines as "death factories." Meantime, jacks-in-office shack up in Moscow at $15,000 per night.

Which is worse, reversion to a mid-19th Century economy or the Luddite sociopaths whose atavistic regression to rule-or-ruin Statism celebrates the prospect? Not just economic but political disaster is these depraved ideologues' considered stock-in-trade. They know the consequences of their actions, and rejoice therein.

Eight of ten voting citizens contribute only open mouths to this debate. Against stupidity, the Gods themselves are helpless.