From 2008 Q3 to 2008Q4, aggregate labor hours fell 7.4% (at an annual rate).
The BEA reported today that aggregate real GDP (that is, aggregate spending) fell only 3.8%.
- Productivity grew 3.6%, and
- We have to continue to question the common "wisdom" that spending drops are causing the employment drops. I tend to think that causes are bigger than effects: its the employment drop that causes the spending drop.