Employment report

The February index of aggregate hours worked was 107.3 as compared to a 4th quarter average of 107.7. That implies that first quarter hours worked are falling at about a 1.5% annual rate. As a first approximation that implies that first quarter real GDP growth will be about the same. Of course this depends on productivity growth. if you assume 1% to 2% productivity growth you are back to around a zero growth rate for real GDP. It looks like a recession, but it could still just be stagnation.

Average weekly earnings rose at a 3.3% annual rate. This implies that real earnings are still falling so there is little hope for a turn around in consumer spending even though February same store sales growth appeared to improve and February auto sales were 15.38 M (SAAR) as compared to 15.33 M in January.