Hours Worked per Person (Employment to Population Ratio x the Average Work Week of Private Workers), shows the sluggish rebound in "labor usage" relative to the population.
The concern... for the last 25 years there has been a very strong relationship between hours worked per person and real GDP growth (a decent relationship prior to 1986, but with a lot more noise), but notice the huge gap since the "recovery" began.
Unless "this time is different" there are two possibilities:
- The Good: Employment will follow (it just needs an unprecedented amount of time)
- The Bad: The economy is outperforming due to all the government support / transfer payments, the impact of which will be fading going forward
Scary chart, not meant for kids!
ReplyDeleteGreat material all week Jake, have a great weekend.
Your first graph is VERY similar to Capacity Utilization also, except yours goes higher in the early 1980s and stays higher. Not to read too much into that.
ReplyDeleteArt
I have a web site where I give advise on penny stocks and stocks under five dollars. If their is anyone that is interested in these type of stocks you can check out my web site by just clicking my name. I would like to comment. I do not think that we will see real improvement in the economy until we see sustainable job growth. Recently the number of jobs created has been running around two hundred thousand a month. The GDP report that just came out recently was only 2% this is not nearly high enough to sustain employment growth of two hundred thousand jobs a month Another factor holding things back is stagnation of wages and benifits. This is good for business owners but terrible for workers.
ReplyDelete