After hovering near a ho-hum 370,000 for most of 2012, the four-week average of claims has fallen abruptly to 336,750, the lowest since the end of 2007. At first blush, that seems to correlate with robust job gains of close to 200,000 per month in the first four months of the year.
Yet a closer look at the April employment report raises a big question: Why are jobs growing so much faster than the number of hours workers are clocking?
In April, aggregate hours worked fell 0.4%, the sharpest such decline since the start of the jobs recovery. One shouldn't make too much of a single month's data point, but over the first four months of the year, private payrolls grew 75% faster than total hours worked.
If job growth had only kept pace with total hours over the past four months, then the U.S. would have added a modest 463,000 private nonfarm jobs vs. the reported 813,000.