Digging into the details of the April employment data, we found that the latest average weekly workweek numbers tell two different stories. The average workweek was 34.3 hours (see Chart 1) in April. The recent recession ended in June 2009 when workers logged in 33.7 hours; the increase in work hours is noteworthy. But the gain is still short of the longer average work week (34.6 hours) which prevailed at the onset of the recession in December 2007. These numbers suggest that employers will have the discretion to postpone employment because there is wiggle room to raise the number of hours worked before they will need to increase payrolls.

The manufacturing workweek has a different message from the average duration of the workweek. The average factory workweek in April at 40.4 hours is higher than the length of the workweek in December 2007 (40.2 hours, see Chart 2) when the recession commenced. Overtime factory hours in April 2011 (3.4 hours) also exceed the 3.3 hour mark seen in December 2007. The length of the factory workweek and overtime hours bode positively for further gains in factory employment as demand for factory goods advances.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com
Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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