December 6, 2024
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 jumped by 227 thousand in November. At the same time the nonfarm workweek rose 0.1 hour to 34.3 hours.
The combinations of moderate employment and fewer hours worked seem to suggest that the labor market has been weakening, but any labor market weakening thus far has been modest.
The changes in employment and hours worked are reflected in the aggregate hours index which rose rose 0.4% in November to 116.9 after having declined 0.3% in October. Given the October and November data we suggest that the aggregate hours index will increase 0.8% in the fourth quarter which, assuming a further increase in productivity, should lead to 2.5% GDP growth in the fourth quarter.
The factory workweek was rose 0.1 hour in November to 40.0 hours after having declined 0.1 hour in October. The manufacturing sector has been slowing gradually in response to still high interest rates. Lower rates in the months ahead should help.
Overtime hours rose 0.1 hour in November to 2.9 hours after having fallen 0.1 hour in October. Manufacturers have adjusted to reduced demand by cutting overtime hours.
Stephen Slifer
NumberNomics
Charleston, SC
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