Labor Hours decreased in 3rd Quarter… It is noteworthy
From what I read, nobody has pointed out the drop in Nonfarm Business Sector: Hours of All Persons in the 3rd quarter. (seasonally adjusted) The index of hours decreased from 110.66 to 110.53. This is actually noteworthy…
Nonfarm Business Sector: Hours of All Persons since 1967. (link to graph)
You can see that hours increase through a business cycle. Looking closely at the numbers, hours really do continually increase through the business cycle. There are very few exceptions when hours decrease during an expansion of a business cycle.
But when hours do tick downward, normally a recession starts within 3 quarters. That has been the pattern since 1967… There has only been a few exceptions where hours ticked downward with no recession.
That is why the decrease in hours during the 3rd quarter is interesting. Are hours peaking?
If hours decrease again in the 4th quarter, history says to watch for a slump.
Just full of good news, heh?
I have not seen any other reference to this data.
From Q2 2000 this index has increased from 109.267 to 110.660 in Q2 2015. That is an increase of 1.393
From Q2 1985 this index increased from 83.950 to 109.267 in Q2 2000. That is an increase of 25.317
In this century the population grew but the ‘Hours of All Persons’ has been capped. And of course wages have been more or less stagnant.
Oh yeh! Free trade is working!
Hi Edward I would like if you could expand a bit more on watch for a slump. You know that if labor share rises in higher wages then the automatic knee jerk reaction is to shrink the labor force. Right? Besides I thought we have been in a slump since 2008 haven’t we?( I guess it depends on what sector of the economy we are talking about) I believe that if you want to see the labor participation rate rise we need to cut off the free flow of illegal labor at the border and reform some SS disability claim rules perhaps. The service economy that is all that is left of it cannot support the type of consumption of the past levels for homes ,autos and education by the middle class in my view. So yes we will see continued downward participation rates(3,4,5 quarters) will not be surprising to me. IMHO
I have a post later today that will respond to your comment.
Why do you even post this garbage? Dude, where is my slump? Labor hours? Why, it surged in October.
Lambert, you should not be allowed to make articles if you make up stuff to support your story.
William, labor force rates are rising. Stop using the government, which incorrectly doesn’t adjust for population changes. It has no choice to fall. When 3% in 1985 falls to 1% growth in new labor in 2015, that number will fall. Please stop posting if you can’t figure that out and how it is constructed.
Go with ZPOP.
“if you make up stuff”
You don’t have much credibility given that Edward linked his data and you did not.
The drop in hours worked data in the productivity report is very confusing.
The employment shows several measures of hours worked and they increased in the third quarter from 0.5% to 1,08 for aggregate weekly payrolls.
Something is really change.
The productivity report also had unit labor cost rising more than prices,
This implies falling profits, what the S&P 500 shows.
That suggests wages are surging. Makes we wonder if October was the BLS’s catching to that fact.
I think you make a good point. Wages are surging somewhat and the BLS data has to represent that.
To The Rage I’m glad that you did not like my post . Maybe it could have hit a nerve somewhere. Mission accomplished. Perhaps you should go to todays TED.com and watch the video on “Moral Bias” by Andreas Ekstrom to try to put real people behind those numbers rather than trying to obfuscate the data.
“But when hours do tick downward, normally a recession starts within 3 quarters.”
Seems to me that when a recession starts, normally hours click downward.
yes, when the recession hits, hours continue to click downward. They start clicking downward before the recession though.