The WSJ noted the 0.1 increase in the length of the average workweek last month and highlighted the 0.3 increase in hours worked in manufacturing. In doing so, they missed much of what happened in July.

Typically, the auto industry shuts down many of its factories in July to retool for the new model year. This leads to a large drop in hours and employment. Since the data are seasonally adjusted, the Bureau of Labor Statistics corrects for the normal July layoffs so it doesn’t appear that the auto industry is going into a slump every July.

This year, there were few, if any, layoffs associated with retooling, since many factories had already been shut. Nonetheless, the seasonal adjustment pushed up reported hours and employment in July for the auto sector. As a result, the seasonally adjusted workweek in the auto sector increased by 1.6 hours in July and added approximately 0.1 hours to the overall average for manufacturing.

While there probably was some real boost to manufacturing hours in July, the picture is certainly less robust than implied by the WSJ article. For example, overtime hours in non-durable manufacturing actually fell by 0.1 hours last month.

–Dean Baker

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Central Europe’s economies continued to contract in January – lead by their manufacturing industries – under the combined weight of a credit crunch and a slump in demand for their exports. My feeling as all three economies – Poland, the Czech Republic and Hungary – are now in recession. Hungary’s is clearly the worst case, and events are moving rapidly and negatively there, but the slowdown in the Czech Economy is also very pronounced, and Poland seems finally to be falling into line, following some internal financial chaos back in October.

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By Alex Nicholson, Bloomberg

Russian manufacturing shrank more in November than during the 1998 financial collapse as the global economic crisis drove output and new orders to record lows and companies cut jobs, VTB Bank Europe said.

VTB’s Purchasing Managers’ Index fell for a fourth month to 39.8, its lowest level, from 46.4 in October, the bank said in an e-mailed statement today. The previous low was 43.2 in September 1998, a month after the government’s ruble devaluation and default on $40 billion of debt. A figure above 50 means growth, below 50 a contraction. The bank surveyed 300 purchasing executives.

“The sense of doom and gloom was only deepening,” in November, Tatiana Orlova an economist in Moscow at ING Group NV said by telephone. “The mood isn’t getting any better.”

Industrial production has slumped and unemployment is rising as declining commodities prices and the seizure of credit markets prompt an outflow of capital. Investors withdrew $190 billion from the country since August, BNP Paribas SA estimates, as oil fell below the $70-a-barrel average needed to balance the 2009 budget. Read more….

By Ruth Mantell, MarketWatch

U.S. ISM index falls to 36.2%, lowest in nearly 27 years

Manufacturing gauges in three major world economies showed sharp contractions in November, according to new data showing fresh recessionary signals as the financial crisis takes a global toll.

In the United States, manufacturing activity contracted for the fourth consecutive month, as a gauge of price pressures hit an all-time low, according to a survey of corporate purchasing managers released Monday by the Institute for Supply Management. The November ISM index decreased to 36.2%, the lowest reading since May 1982. Read the full report.

The U.S. result for November “promises continued recession,” wrote Ian Shepherdson, chief U.S. economist with High Frequency Economics, in a research note.

“Manufacturing is in freefall, with output collapsing,” Shepherdson wrote. “We see no prospect for near-term improvement.”

Elsewhere, the purchasing managers’ indexes for the euro zone and for the U.K. fell to record lows. See full story. And in China, a gauge of the country’s manufacturing activity in November showed the sharpest contraction in the survey’s history, which began in 2004. Read more….

By Shobhana Chandra, Bloomberg

Manufacturing in New York contracted in November at the fastest pace on record as orders and sales plunged.

The Federal Reserve Bank of New York’s general economic index fell to minus 25.4, the lowest since records began in 2001, from minus 24.6 percent in October, the bank said today. Readings below zero for the Empire State index signal manufacturing activity is shrinking.

Factories are trimming production as banks restrict lending, worsening the economic slump that may be the longest in decades. A slide in overseas demand is also slowing American exports, which were helping manufacturers cushion the slide in U.S. sales.

“It’s almost like a snowballing effect as we’re starting to see the manufacturing numbers get worse,” said Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, who had forecast the Empire index would drop to minus 25. “We expect sharp declines with a slow recovery from this recession.” Read more….