Average Workweek: ‘Nobody Is Going to Be Hiring Anytime Soon’

From the Wall St. Journal, July 2, 2009  By Matt Phillips

Ugh. The June jobs numbers came in pretty ugly. Nonfarm payrolls fell 467,000 versus the 350,000 predicted by those the great Alan Abelson refers to as "Street Nostradamuses."

Unemployment ticked up to 9.5% from the 9.4% it hit in May. The
headline numbers were undoubtedly bummers, but we figured we'd focus on
another number embedded in the report for a bit of insight into the
market's 150-point-plus selloff this morning.

Market watchers seem particularly troubled with the figure on
average workweeks. In June, the average workweek inched down by 0.1
hour to 33.0 hours. That's the lowest level for that figure on record -
that is, going back to 1964.

"I think the average work week is the huge story," said Dan Cook,
senior market analyst at IG Markets. "It tells us that nobody is going
to be hiring anytime soon."

Ryan Detrick, senior technical strategist at Schaeffer's Investment
Research, also noted the average workweek figure, writing in an email
that the all-time low in hours "further concludes that even if you have
a job, the hours simply aren't there like they use to be. So many
people depend on overtime and there simply isn't enough work to
compensate for this."

So in addition to the worse-than-expected job loss, the report also
suggests that the economic punch of the remaining jobs is getting
punier as the workweek shrinks. (People that work less generally have
less to spend.)

On the other hand, the manufacturing workweek actually ticked up
slightly, by 0.1 hour to 39.5 hours, and factory overtime stayed flat
at 2.8 hours. That reinforces the notion
that there may be some bounce in the manufacturing sector, as companies
are eventually forced to - if not add to inventories - at least slow
the rate of running them down.