Mortgage Strategery: Employment Report Behind the Headlines

From Calculated Risk:

Employment-Population Ratio,

Part Time Workers,

Average Workweek

Note: Several analysts follow the average workweek series to look for the end of a recession.

The idea is that companies will increase the work week before they start hiring,

so the average weekly hours might increase as a recession ends.

The small increase in July will be viewed as a possible indicator.

Other employment measures that are used to judge the end of a recession are

the four-week moving average of initial unemployment claims (has fallen significantly)

and the diffusion index (previous post).

A few more graphs based on the (un)employment report ...

Employment-Population Ratio

This graph show the employment-population ratio; this is the ratio of employed Americans to the adult population.

Note: the graph doesn't start at zero to better show the change.

The general upward trend from the early '60s was mostly due to women entering the workforce. As an example, in 1964 women were about 32% of the workforce, today the percentage is close to 50%.

This measure fell slightly in July to 59.4%, the lowest level since the early '80s. This also shows the weak recovery following the 2001 recession - and the current cliff diving!

Average Weekly Hours

The average weekly hours has been declining since the early '60s, but usually falls faster during a recession. Average weekly hours in June was at the lowest level since the series began in 1964, and the uptick in July was very small.

Note: the graph doesn't start at zero to better show the change.