November 1, 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 climbed by 12 thousand in October. At the same time the nonfarm workweek was unchanged at 34.3 hours.
The combinations of moderate employment and fewer hours worked seem to suggest that the labor market has been steadily weakening However, any labor market weakening thus far has been modest.
The changes in employment and hours worked are reflected in the aggregate hours index which was unchanged in October at 116.7after having risen 0.1% in September and 0.3% in August. This index increased 0.4% in the third quarter which compares to GDP growth of 2.8% in that quarter. Given the October data we suggest that the aggregate hours index will increase 1.0% 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 declined 0.1 hour in October to 39.9 after having fallen 0.1 hour in September. The manufacturing sector has been slowing gradually in response to still high interest rates. Lower rates in the months ahead should help.
Overtime hours fell 0.1 hour in October to 2.8 hours after having declined 0.1 hour in September. Manufacturers have adjusted to reduced demand by cutting overtime hours.
Stephen Slifer
NumberNomics
Charleston, SC
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