Will the Best Job Measure Stand Up?

Every month, when they are released, the job numbers receive a tremendous amount of scrutiny. Analysts focus on two measures: the unemployment rate and the number of jobs created. But some economists say neither is the best gauge of the job market, says host Mary Walden. “What do they say is?” she asks her husband, N.C. State University economist Mike Walden.

Mike Walden: Well, what these economists say is, actually, if you’re trying to put a single number on the amount of work effort by workers, it’s really the aggregate number of hours worked. It’s not the number of jobs. It’s not the unemployment rate, but it’s simply the number of hours that workers put in. And, of course, this is going to be a function of the number of workers, as well as the average hours that each worker does indeed work. And so, if you look at this number and contrast it to some of the other measures that were mentioned — like the unemployment rate, the number of jobs —  you actually get a much less optimistic view of the recovery in the job market. In fact, during a couple of recent months, we actually saw the aggregate number of hours worked go down simply because we had a very slow increase in the creation of new jobs, and we had a reduction in the number of hours worked per job. So this is a statistic that doesn’t get a lot of attention, but if you really think of it, it might be the best measure of the labor market.