Full-time Jobs At Part-time Hours Will Continue To Affect Consumer Confidence, Spending

While the focus on the recent June jobs report was on the number of job losses and the unemployment rate, the average workweek and average weekly earnings data was also not very encouraging. The average workweek fell to 33 hours, down 0.1 hours, taking it to its lowest recorded level going back to 1964 (see Business Week article). While hourly earnings remained flat, the shorter workweek caused average weekly earnings to also fall from $613.34 in May to $611.49 in June. With employed full-time workers scheduled for what is looking more like part-time work, consumer spending and consumer confidence will most likely continue to suffer. This will no doubt put pressure on consumer discretionary stocks and make the prospects of a jobless recovery more likely. Given that companies tend to increase the workweeks of existing employees, and even offer overtime to such employees before taking on the expense of hiring and training new employees, it may take a long time before consumer spending once again reaches the levels required to bring the average workweek back to normal hours. As a result, it may be a while before the Friday noon traffic is caused by workers once again going out for a business lunch, and not simply going home early for the week.