July 5 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 206 thousand in June.   At the same time the nonfarm workweek was unchanged at 34.3 hours.

The monthly employment gains remain relatively robust.  Thus, despite slowing down hiring has held up remarkably well given a sharply higher level for the fed funds rate.

The changes in  employment and hours worked are reflected in the aggregate hours index which rose 0.1% in June to 116.5 after climbing 0.2% in May after having declined 0.2% in April.   This index increased 1.6% in the second quarter which we believe is relatively consistent with our projected 2.0% GDP growth rate for that quarter.

The factory workweek was unchanged in June at 40.2 hours after having risen 0.1 hour in May.   The manufacturing sector has slowed gradually in response to higher interest rates, but it appears to have hit bottom and actually inched upwards in recent months.

Overtime hours were unchanged in June at 3.0 hours after having been unchanged in May at 3.0 hours.   Manufacturers appear to have adjusted to the prospect of reduced demand by cutting overtime hours.

Stephen Slifer


Charleston, SC