Self-Employed Numbers Drop, Unemployment Rises

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The New York Sun

The increase in American unemployment that’s jeopardizing economic growth is being driven by a drop in the number of people working for themselves, government figures indicate.

Hours worked by the self-employed dropped at a 15.5% annual pace in the last three months of 2007, the biggest decrease in 15 years, according to data provided to Bloomberg News yesterday by the Labor Department.

The decline “is probably related to the housing downturn, since one in six workers in construction is self-employed, twice the average for all industries,” an economist at Global Insight, a Lexington, Mass., forecasting firm, Patrick Newport, said.

The figures may be another indication of how the deepest real-estate slump in a quarter century is filtering through the economic statistics. The Labor Department said yesterday that worker productivity grew more than forecast last quarter as hours for all employees, including those who work for themselves, fell at a 1.5% pace, the most in five years.

The number of people running their own businesses dropped by 365,000 last quarter, compared with the same period in 2006, according to separate Labor Department numbers. The decline in the number of hours worked by the self-employed last quarter reflected a 9% annualized drop in employment combined with a 7% decrease in average weekly hours for those still with work, the department said.


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