Today's news from the U.S. Labor Department is heartening, but no reason to pop the champagne bottles. Imagine celebrating because only 247,000 jobs are gone! Still 247,000 is better than 645,000, which was the monthly average from November until April. It's important not to get excited about the minuscule decline in the unemployment rate. Remember, the unemployment rate is merely fraction. The denominator is the number of people in the labor force. That dropped from June to July. Why are there fewer people in labor force? Probably because some have given up and gotten out. The number of unemployed people also declined. Whatever the numbers, you put the number of unemployed above the labor force and you have the unemployment rate.
This is what I'm looking for: An increase in work hours. It's thrilling that manufacturing hours are creeping up. In May, the average work week was 39.4 hours. Now it's 39.8 hours. Twenty-four minutes isn't much, but it's going the right way, especially since, in my opinion, manufacturing is the bedrock of our economy.
I'm also looking for an increase in overtime. Nothing there yet. It alarms me that we've lost 13,500 jobs in architecture and engineering. That means there is still no serious investment in the economy. If these guys aren't working, no one's going to be working down the line. It is also alarming that temporary help services continue to lose jobs. It was down 9,800 from June to July. We can expect a change in the labor market when that trend shifts. Companies are increasingly offsetting risk by turning to temporary employees. Permanent hiring will follow temp hiring. Also alarming is the dearth of hiring in construction. But, it makes sense. If the engineers and architects aren't working, then the construction people are certainly not working! They've long ago finished up whatever projects still had funding behind them.