Reading the headlines, it’s happy days again.
In February, employers added 242,000 jobs.
Pretty good, right?
Well, unfortunately, there’s a rub …
You see, concurrently both hours worked and average wages dipped,
Average hours worked dropped from 34.6 to 34.4.
That may not sound like much of a dip but it more than offset the number of jobs added.
To that point, total hours worked in February dropped by about 1/2% in February.
And, making matters worse, average wages dropped by a couple of pennies … from $25.38 to $25.35.
Again, that may not sound like much, but apply the lower wages to fewer (not more) hours worked … and guess what you get.
Yep, a drop in aggregate income … (employment X hours X wages)
Employment increased by 242,00 … a whopping .17% (<= note the decimal point)
Hours worked dropped by .2 of an hour … about .6%
Wages dropped by 3 cents / hour … about .1%
The combined effect: a 1/2 point drop in income.
So, why the victory dance?