Employment report follow up

By Spencer,

Yesterday in describing the employment report I said:

Moreover, the manufacturing work week rose from 39.5 to 39.8 hours and overtime hours were 2.9 hours versus 2.8 in the second quarter. Much of this was auto and confirms the other reports that at least auto output is rebounding.

I was criticized and accused of political bias because I was placing too much emphasis on the auto industry. According to my critics the increase in the auto hours worked should be ignored because it was due to government interference and did not reflect what was really happening in the economy.

Moreover, it was implied that the auto industry was atypical and was not representative of the rest of the economy. The BLS publishes the hours worked for ten sub industries of durable manufacturing. So what happened to them? In nine of the ten industries the work week expanded last month and four industries switched from falling hours worked to rising hours worked.

Moreover, in the private service providing industries, hours worked expanded 0.3%, the first monthly increase since August, 2008. Just to put this in perspective, employment in the private service providing industries is 112,788,000 or roughly ten times employment of 11,817,000 in all manufacturing:

So the criticism that the hours worked just reflected the impact of the cash for clunkers on the working of the economy is obviously completely wrong.

Yes, as I pointed out the hours worked increase was impacted by the auto sector, but it was widespread through out the economy. The improvement in the service sector was particularly significant and that had nothing to do with the auto sector.

Moreover, I specifically pointed out that hours worked is a leading indicator of future employment. At no time did I say that the recession was over. That was the reason I characterized the employment report as encouraging. Compared to many other private
analysts, especially on Wall Street, I thought my analysis was very tempered.

I do not see where it was politically biased, and the argument that hours worked expanded only because of the auto sector just reflects ignorance.