Econintersect: The Gallup employment poll reports a steep decline in the unadjusted unemployment rate since the end of June to 7.3% in mid October. At the mid-point of the year Gallup reported 8.2% unemployed. The current number is 11% lower. The decline in the unemployment rate for the same period in 2011 was 13%; the unemployment rate in mid October 2011 was 8.4%. Also, the decline from the year’s high in February of 2012 (19.8%) was similar to the same period in 2011 (18.4%). The decline from February 2011 (10.3%) to mid October 2012 (7.3%) was more than 29%. The data shows a consistent rate of reduction in the unemployment rate over the past two years.
The graph from Gallup shows the volatility in the two year period when one focuses on the month-to-month changes:
The seasonally adjusted numbers from Gallup show more modest declines in unemployment than are obtained from the unadjusted data:
- Down 22% from the 2011 high in April (9.9%) to the current reading;
- Down 10% from the 2012 high in both February and April (8.6%) to the current reading.
But again the data shows a year-to-year consistency in improvement. This conclusion is supported by the following graph comparing the two data series since January 2010.
It is seen in the graph above that the steep declines cited earlier in the article are not unique in the recovery period. Similar steep declines in unemployment have occurred multiple times, interspersed with sharp retracements higher. What is evident though is a systematic decline in the unemployment rate over this time period: 0.72% per year for BLS data and 0.87% for Gallup.
One area of continuing problems that Gallup shows in their data is the persistency of high levels of unemployment for economic reasons (involuntary part-time):
For September 2012 the BLS reported that 8.482 million people were working part-time because they could not get full-time work. In 2006 and 2007 that number ranged from 3.7 to 4.6 million, approximately half of the current level.
Gallup did not discuss the size of the labor force which the BLS reports is roughly the same as it was four years ago. The population has grown by several million during that time.
The conclusions from Gallup:
The decline in unemployment but uptick in the number of Americans working part time but looking for full-time work is likely the result of seasonal hiring, which picks up in the fall for Halloween and continues through the end of the holiday season. Still, seasonally adjusted employment, which accounts for these types of periodic fluctuations, has declined modestly since the end of September. This is a promising sign that employers are adding jobs that will last into the new year.
Gallup’s mid-month unemployment numbers are a good early predictor of the monthly numbers released by the BLS. The decline in Gallup’s unadjusted and adjusted employment rate suggests that the BLS may report another decline when it releases the October data on Nov. 2.
Sources:
- In U.S., Unadjusted Unemployment at 7.3% in Mid-October (Jenny Marlar, Gallup Economy, 17 October 2012)
- Labor Force Statistics from the Current Population Survey (Bureau of Labor Statistics)
