### WHAT IS Aggregate Hours

Aggregate hours are the sum of the hours worked by all employed people, either full or part time, during the course of a year. Aggregate hours can also refer to the total hours worked by one sector or group of workers.

### BREAKING DOWN Aggregate Hours

Aggregate hours refer to a measure of the total labor required to produce real Gross Domestic Product (GDP). Aggregate hours generally provide a better measure for total labor than the number of people employed because they are a measure of a total number of hours. Between the overtime hours, part-time and full-time jobs, the number of people employed cannot provide as accurate a quantifiable measure of total labor as aggregate hours can. The __U.S. Department of Labor__ keeps statistics on the sum of all hours worked by full and part-time workers across or within all industries.

The Department of Labor calculates the indexes of aggregate weekly hours by dividing the current month’s estimates of aggregate hours by the corresponding 2007 annual aggregate hours. Aggregate hours estimates are the product of estimates of average weekly hours and employment. Aggregate payrolls estimates are the product of estimates of average hourly earnings, average weekly hours, and employment.

### Aggregate Hours and Real Gross Domestic Product (GDP)

Real GDP is a macroeconomic, inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year. Unlike nominal GDP, real GDP can account for changes in price level and provide a more accurate figure of economic growth. Aggregate hours are part of total labor calculations required to determine real GDP.

For example, faster payroll growth and an increase in average weekly hours can drive aggregate hours up. Assuming stable productivity, more hours worked would mean more output. Therefore, if workers are producing the same amount of goods or services per hour, and are working more hours, than real GDP is higher.

Real GDP differs from nominal GDP in that real GDP is adjusted for inflation while nominal GDP is not. As a result, nominal GDP will often appear higher than real GDP. Nominal values of GDP and other income measures from different time periods can differ due to changes in quantities of goods and services or changes in general price levels. As a result, taking price levels and inflation into account is necessary when making comparisons between different time periods. Values for real GDP are adjusted for differences in prices levels, while figures for nominal GDP are not.