April 7, 2025
In any given month employers can boost output by either additional hiring workers or by lengthening the number of hours that their employees work. Payroll employment climbed by 228 thousand in March In the past three months the average increase has been 152 thousand. Jobs are still being created, but employers seem to fear slower growth in the months ahead as tariffs take their toll. For now they have chosen to shorten the workweek of their existing employees, but if the expected weakness materializes they will lay off workers at some point down the road.
The nonfarm workweek was unchanged in March at 34.2 hours after having risen 0.1 hour in February Prior to the recession the nonfarm workweek was averaging 34.4 hours so it is clearly weaker than it was five years ago. Firms are becoming cautious.
The changes in employment and hours worked are reflected in the aggregate hours index which rose 0.2% in March to 116.6 after climbing 0.3% in February after having declined 0.2% in January. In the first quarter the aggregate hours index rose 0.5% which we believe will lead to a 1.5% GDP growth rate in that quarter.
The factory workweek rose 0.1 hour in March to 40.2 after having risen 0.1 hour in February. The manufacturing sector has been fairly steady in recent months.
Overtime hours were unchanged in March at 2.9 hours after having risen 0.1 hour in February after having been unchanged in January.
Stephen Slifer
NumberNomics
Charleston, SC
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