Average Weekly Hours, Manufacturing

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The following is an excerpt from the Frequently Asked Questions section of the U.S. Department of Labor's Bureau Of Labor Statistics website. It describes the methodology behind the calculation of Average Weekly Hours Worked statistics:

What kind of hours and earnings data are available?
National estimates of average weekly hours and average hourly earnings are made for the private sector, with detail for about 850 industries as well as for overtime hours in manufacturing. Hours and earnings are derived from reports of gross payrolls and corresponding paid hours for production workers, construction workers, or nonsupervisory workers in the service sector. The payroll for workers covered by the CES survey is reported before deductions of any kind, e.g. for old-age and unemployment insurance, withholding tax, union dues or retirement plans. Included in the payroll reports is pay for overtime, vacations, holidays and sick leave paid directly by the firm. Bonuses, commissions, and other types of non-wage cash payments are excluded unless they are earned and paid regularly (at least once a month). Employee benefits paid by the employer, as well as tips and payments in kind, are excluded. Total hours during the pay period include all hours worked (including overtime hours), and hours paid for holidays, vacations, and sick leave. Total hours differ from the concept of scheduled hours worked. The average weekly hours reflects effects of numerous factors such as unpaid absenteeism, labor turnover, part-time work, strikes, and fluctuations in work schedules for economic reasons. Overtime hours in manufacturing are collected where overtime premiums were paid if hours were in excess of the number of straight time hours in a workday or workweek.

http://stats.bls.gov/ces/cescope.htm

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The excerpt below is taken from a Sept. 18, 2003 news release by the Conference Board, a not-for-profit organization that produces business and economic information, including the Index of Leading Economic Indicators. Average Weekly Hours worked in manufacturing is one of the components of the leading indicators:

"The Conference Board announced today that the U.S. leading index increased 0.4 percent, and the coincident and lagging indexes held steady in August. The leading index increased again in August, and is now up by 2.5 percent from its low in March (more than a 6.0 percent annual rate). In addition, the strength in the leading index has been widespread over this period. The coincident index was unchanged in August, but has been rising gradually from its recent low in April. The growth rate of the coincident index has picked up to about 1.2 percent (annual rate) over the last four months, and this growth has also been widespread - only employment has continued declining. The upturn in the leading index since March has already been followed by stronger real GDP growth in the second quarter and by the recent increases in the coincident index. In addition, the recent strength in the leading index suggests a further strengthening of economic growth in the second half of the year.

LEADING INDICATORS. Four of the ten indicators that make up the leading index increased in August. The positive contributors - beginning with the largest positive contributor - were interest rate spread, vendor performance, real money supply, and building permits. The negative contributors - beginning with the largest negative contributor - were average weekly initial claims for unemployment insurance (inverted), index of consumer expectations, manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and stock prices. Average weekly manufacturing hours held steady in August. The leading index now stands at 113.3 (1996=100). Based on revised data, this index increased 0.6 percent in July and 0.4 percent in June. During the six-month span through August, the leading index
increased 2.4 percent, with eight of the ten components advancing."

http://www.globalindicators.org/us/LatestReleases

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The following perspective is taken from an article in the 3rd Quarter 2002 issue of the New England Economic Review, a publication of the Federal Reserve Bank of Boston, written by Scott Schuh and Robert K. Triest. In it the authors look at how manufacturing employment flows to the South and West may be due more to the type of manufacturing rather than simple demographic shifts:

"The distribution of manufacturing employment across regions of the United States has changed tremendously over time. Shares of manufacturing employment in older, northern regions of the country have declined markedly relative to shares in the Sunbelt regions. But the shifting of manufacturing employment shares goes beyond the well-known migration of population to the South and West. Manufacturing employment relative to population has also fallen in northern regions, and even the absolute number of manufacturing jobs has declined in these areas as well. Anecdotal evidence suggests that some of the shift in the distribution of manufacturing employment is due to the movement of particular firms and industries to the Sunbelt in search of lower costs of production and increased proximity to customers. However, other forces driving the shift between regions are also often cited. The fast-growing Sunbelt regions may have benefited from specialization in newer, faster-growing manufacturing industries than those clustered in the North. And the Sunbelt may also have been the preferred location for entrepreneurial manufacturing startups. Our central finding is that although intrafirm and intra-industry job reallocation between regions makes up relatively small shares of total gross employment flows, these flows account for a substantial portion of the differences in manufacturing employment growth rates across regions. Reflecting the constant churn of plant births, expansions, contractions, and closures, regional gross job flow rates are much larger than are regional rates of net employment growth. So, job reallocation between regions can be both small relative to total gross flows and large relative to net employment growth. Our results are consistent with anecdotal evidence of firms shifting jobs from older, northern facilities to newer plants in the Sunbelt states. And our results refute the hypothesis that manufacturing employment in the Sunbelt areas has grown faster than in the North because of the Sunbelt's specialization in fast-growing industries."

http://www.bos.frb.org/economic/neer/neer2002/neer302c.pdf

 

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