WSJ: “Rot in the job numbers” … yeah, but a week late.

This morning, the WSJ published an editorial titled “The Hidden Rot in the Jobs Numbers ” by Prof. Edward  Lazear, who was chairman of the president’s Council of Economic Advisers from 2006-09, is a professor at Stanford University’s Graduate School of Business and a fellow at the Hoover Institution.

Strong credentials, right?

The punch line: “Hours worked are declining, resulting in the equivalent of a net loss of 100,000 jobs since September.”

No kidding, Prof. Lazear?

Loyal HomaFiles readers are already aware of that … assuming that they read last Monday’s post: Smokin’: Employment growth exceeds expectations … oh, really?

Gotta crow a bit on this one … beat the WSJ by a week.

Here’s what we said last Monday:


Smokin’: Employment growth exceeds expectations … oh, really?

The headlines are that 175,000 jobs were added in February.

Proof positive that the Obama economy is kicking in.



Hate to rain on the parade, but ….

The number of unemployed folks increased by 223,000 … more than than number of jobs added.



So, the unemployment rate  ticked up  6.7%.

Only a 1.10th of a point change but, still, wrong direction for a recovery.



More important, the average number of hours worked dropped again.

Note that the 2012-2013 average was about 34.45 hours .

The drop to 34.2 sounds like no big deal … what’s 10 or 20 minutes, right?



But, even a small number times a very big number gives you a  big number.

I like to look at a metric called FTE’s … full-time equivalent employees … simply the number of people employed times the average number of hours worked divided by 37.5 full -time hours in a week .

Technical Note: Use 40 hours if you want or, if you’re an ObamaCare aficionado, use 30 hours … the point of the analysis doesn’t change.

Note that when employment is restated into FTEs, you get a different answer: the labor force is shrinking, not growing.



I guess that’s good news since more people are being “liberated from work”.

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