With GDP growth at 2% for the past several years and expected through Q1/14, the recent employment rise from about 150,000 net new jobs/month in summer to about 200,000/month since seems odd. It’s because firms are finally hiring because labor productivity growth has been close to zero for the past 15 months, down from 3.3% in 2009 and 2010. Thus, firms must hire more people to make more stuff.
Tag Archives: net new jobs
Lots of Labor
The best news from the August employment report was that private payroll hours jumped 0.3%. While that seems small, had employers kept hours worked unchanged and hired more workers to do the added work, payrolls would have risen by 572,000 not 172,000. Moreover, average manufacturing worker overtime is 4.4 hours/week. The last time it was this high the unemployment rate was 5.2%, now it’s 7.3%. Employers must eventually hire.
Retraction Subtraction
The economy added just 96,000 jobs in August. Worse, the DOL lowered the June and July estimates by 41,000! While the unemployment rate fell to 8.1%, it did so only because 368,000 Americans left the labor force, reducing the participation rate to 63.5% from 63.7%, its lowest level since 9/81. Factory employment fell by 15,000, the most in 24 months and temp agencies reduced employment by 5,000, but construction added 1,000!