Sunday, October 20, 2013

Private Hours Worked per Capita (Musical Tribute)

The following chart shows the 12-month moving average of annualized private production and nonsupervisory employee hours worked per capita.

Click to enlarge.

By looking at hours worked instead of the number of those employed, we will not be swayed by the illusionary job growth created by more people working but with fewer hours worked each.

And we wonder why the economy is doing so poorly since 2000?

Let's zoom in a bit and look at growth rates.

Click to enlarge.

As seen in the chart, the growth peaked at just over 2%, just like it did heading into the Great Recession.

The first derivative (growth) is still positive. However, the second derivative (change in growth) is looking toxic. It was looking similarly toxic in August of 2007. In hindsight, August of 2000 was no picnic either. There was less advance warning then though.

It’s dangerous
I’m fallin’
There’s no escape

Nothing is locked in stone. I'm not claiming to be able to accurately predict the future here, although I am definitely not optimistic. We all better hope that there is an escape, otherwise we'll enter the next recession while still in ZIRP. With the stock market hovering at record levels, a party that would be. Not.

In any event, I will be shocked if this is a great Christmas season for retailers. I stand by my relatively long standing prediction that the next recession will hit on or before October of 2014. And yes, if I am correct we'll still be in ZIRP when it hits. Sigh.

This is not investment advice.

Source Data:
BLS: Employment
St. Louis Fed: Population

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