August 5, 2022
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 372 thousand in June. In addition to hiring people, businesses can also alter the hours of existing employees. The nonfarm workweek was unchanged in July at 34.6 hours.
The changes in employment and hours worked are reflected in the aggregate hours index which is on track to increase 3.4% in the third quarter. That seems to imply that third quarter GDP growth will be positive by perhaps 2.0% after having fallen in each of the first two quarters of the year.
The factory workweek was unchanged in July at 40.4 hours after having been unchanged in June The manufacturing sector continues to recover from the March/April 2020 recession. The manufacturing sector is still trying to bolster output to satisfy as much of the extremely strong demand as it can. But at the same time factory production is being hampered by an inability to find an adequate number of skilled workers, lengthy delays in receiving required materials, dramatic increases in commodity prices which makes it difficult to produce an affordable product.
Overtime hours rose 0.1 hour in July to 3.3 hours after having declined 0.1 hour in May. The manufacturing sector still needs to quicken the pace of production to keep up with orders..
Stephen Slifer
NumberNomics
Charleston, SC
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