Employment Report

By Spencer

The employment report was bad almost across the board.

The monthly index of hours worked fell 1.0% to 104.7. Compared to the last quarter average of
106.1 this implies that 4th quarter hours worked are falling at about a 5% annual rate.

When you compared the employment drop in this cycle we are now seeing a more severe drop than in the 1974 and 2001 recessions. This is clearly testing the bounds of the worse post-WW II recession.

The one encouraging sign is that average hourly earnings are not weakening. But even this months nice pop was largely offset by the fall in hours worked so that weekly nominal wages only rose 0.08%. So if there was any inflation in November real weekly wages fell.
The other point that I have not seen any comment on is that with the plunge in final demand we are now seeing the classic involuntary inventory accumulation. But higher inventories are a leading indicator of more economic weakness. So we are no where near a bottom in this recession.

P.S. Just thought I would add this table. It is hard to believe that President Carter is cited by many for having a horrible economy when employment rose 10 million during his term while the same people claim that Bush has a great record.