Businesses Are Not Hiring Because of a Lack of Demand, Not Confidence

July 22, 2010

USA Today wrongly told readers that: “private employers are uncertain about the economy’s health and are hesitant to add jobs.” The uncertainty of businesses does not explain their reluctance to add workers. If this were the case, then businesses would be increasing the number of hours worked per worker. While average weekly hours are up somewhat from the low hit last fall, they are still down by 0.7 hours from their pre-recession level. This indicates that firms are not hiring because they have no need of additional labor.

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