I posted last month about how overtime hours are close to an all time high, even though employment is not.
Here’s a graphic with a slightly different take:
This shows a great deal of similarity between the current expansion and the expansion of the early 90’s. That expansion was regarded as weak for its first 5 years. There is also some similarity to the “Reagan expansion” after the 1981-2 recession (although in that one the unemployment rate declined from its peak by a full percentage point more than it has in this expansion: 10.8% to 7.2%, instead of 10.0% to 7.6%).
One way to view this is presented in the article: that business are giving existing workers more hours because they are unsure if the strong sales will keep up. The alternative given in class is that we’ve increased the fixed costs of hiring a new worker to the point where firms can’t justify bringing them on.
Read the whole thing, entitled “Factory Overtime Cranks Up” in the April 18 issue of The Wall Street Journal.