via Mike Shedlock
Employers are hiring like mad, but employees are working fewer hours in most job categories.
Weekly Hours Then and Now
- Manufacturing Production 41.5 Then, 40.6 Now
- Manufacturing 40.5 Then, 40.1 Now
- Construction 39.0 Then, 38.9 Now
- Total Private 34.4 Then, 34.3 Now
- Retail Trade 30.7 Then, 29.8 Now
- Leisure and Hospitality 25.8 Then, 25.3 Now
Peak Weekly Hours
Weekly hours generally peaked sometime early in 2021. Retail trade weekly hours peaked in November of 2021. Total private weekly hours peaked at 35.0 hours in January of 2021 and has been sliding ever since.
Seven-tenths of an hour multiplied by the current employment level of 161,262,000 is 112,883,400 hours. At the current average work week of 34.3, that’s the equivalent of 3.29 million employees!
Let that sink in. At the reduced work week compared to January of 2021, the economy needed to add 3.29 million employees just to break even on hours worked.
Employment did rise from 149,871,000 in January of 2021 to 161,262,000 in July of 2023. That’s a rise of 11.391 million so the index of total hours worked went up over that period.
The average work week and index of aggregate hours data only goes to March of 2006. Here is a long term chart.
Weekly Hours Since 2006
Index of Aggregate Hours
The index of aggregate hours was 115.1 in January of 2023. It was also 115.1 in July of 2023.
Employment rose from 160.19 million to 161.26 million, an increase of 1.07 million, just to work the same number of hours.
In that same time frame, nonfarm payrolls rose from 155.00 million jobs to 156.34 million jobs.
Hoot of the Day
It took an increase in employment of 1.07 million (1.34 million jobs) to work the same number of aggregate hours in July of 2023 as January of 2023.
Thus, strong jobs is really a function of the desire of employees to work fewer hours and/or employers fearful of any layoffs so they schedule a shorter work week for their employees.
In particular, Leisure and Hospitality hours are down from a peak of 26.7 hours to 25.3 hours. That’s a lot of part time employees.
For the Second Month, the Jobs Report Falls Short of Lofty Expectations
Four sectors lost jobs in July, Manufacturing, Transportation and warehousing, information, and professional and business services.
Gains in Leisure and Hospitality slowed to a crawl.
For discussion of today’s job report please see For the Second Month, the Jobs Report Falls Short of Lofty Expectations
Labor Productivity Jumps 3.7 Percent in 2023 Q2 as Hours Worked Declines
Yesterday, I reported Labor Productivity Jumps 3.7 Percent in 2023 Q2 as Hours Worked Declines
Actual hours worked fell in business, manufacturing, and nonfarm business.
What Do Federal Tax Receipts and Total Receipts Suggest About Recession?
In case you missed it, please see What Do Federal Tax Receipts and Total Receipts Suggest About Recession?
The above chart is through 2023 Q1. Tax data for the second quarter is not yet available. See the above link for details.
Final Thoughts
Gross Domestic Income (GDI) and Gross Domestic Product (GDP) are two measures of the same thing. They equal over time.
For discussion of GDI and GDP, please see Real GDP Beats Expectations, Rises 2.4 Percent in First Estimate for 2023 Q2
Once again, we see an enormous and rising discrepancy between jobs and employment, especially full time employment.
The weakness in full time employment also turns up in tax data, productivity, and GDP reports. Collectively, these data items suggest GDI, not GDP, is a better measure of the economy.