The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, was 43.9 percent in February. This is statistically similar to the 44.1 percent measured in January, but it is the highest measurement of P2P for any February since Gallup began tracking the metric daily in 2010. February is typically one of the lowest months for P2P in any year, and the downward trend over the past few months fits the normal seasonal pattern.
Gallup's P2P metric tracks the percentage of the U.S. adult population aged 18 and older who are employed by an employer for at least 30 hours per week. P2P is not seasonally adjusted. Gallup does not count adults who are self-employed, work fewer than 30 hours per week, who are unemployed or are out of the workforce as payroll-employed in the P2P metric.
Workforce participation among U.S. adults rose slightly from 66.7 percent in January to 67.0 percent in February. Workforce participation measures the percentage of adults aged 18 and older who are working, or who are not working but are actively looking for work and are available for employment.
Since February 2010, the workforce participation rate has ranged narrowly between lows of 65.8 percent and highs of 68.5 percent, but since mid-2013 have most often registered at or below 67 percent. Rising workforce participation may be a sign of improving labor market expectations among Americans who would prefer to be working but have refrained from even looking for work. While Gallup only began recording this metric in January 2010, Bureau of Labor Statistics numbers show that labor force participation before the 2008 financial crisis was three percentage points higher than it is today, and has yet to recover from that initial decline.
Gallup's U.S. unemployment rate represents the percentage of adults in the workforce who did not have any paid work in the past seven days, for an employer or themselves, and who were actively looking for and available to work. Gallup's unadjusted U.S. unemployment rate fell 0.4 points to 6.7 percent in February, similar to the 0.6-point fall in February 2014. Unlike Gallup's P2P rate, which is a percentage of the total population, traditional employment metrics -- such as the unemployment rates Gallup and the U.S. Bureau of Labor Statistics (BLS) report -- are based on the percentage of the workforce. While both Gallup and BLS data are based on robust surveys, the two have important methodological differences.
Gallup's measure of underemployment in February is 16.2 percent, up from the level registered in January, but still lower than what Gallup has measured in prior years. Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed (6.7 percent) and those who are working part time but desire full-time work (9.5 percent). While Gallup's measure of unemployment fell in February, the percentage working part time but who want full- time work rose slightly faster at the same time, resulting in a 0.4-point increase in the underemployment rate.
Though P2P registered a nominal decline of 0.2 percentage points, 43.9 percent still represents a relatively strong P2P number for February and continues a trend of positive employment news. Similarly, the rise in underemployment this past month is also partly related to the rise in the number of Americans who were previously considered out of the workforce and who are now looking for new jobs. Though, admittedly, they would prefer to be working more than they currently are, these individuals are at least mobilized and engaged in some type of productive work. If the employment situation continues to strengthen over the next few months, more of these underused workers may join the ranks of the full-time employed.
Gallup tracks daily the employment status of the U.S. population and the workforce using a set of questions designed to measure U.S. employment accurately, in accordance with International Conference of Labour Statisticians standards. Based on an individual's responses to the question series (some of which are asked of only a subset of respondents), Gallup classifies respondents into one of six employment categories: employed full time for an employer; employed full time for self; employed part time, but do not want to work full time; employed part time, but want to work full time; unemployed; and out of the workforce.
Payroll to Population is a measure of those who are employed by an employer for at least 30 hours per week, and is calculated as a percentage of the total population.
Underemployed respondents are employed part time, but want to work full time, or are unemployed. Unemployed respondents are those within the underemployed group who are not employed, even for one hour a week, but are available and looking for work. Unemployment and underemployment are calculated as a percentage of the workforce.
Because results are not seasonally adjusted and there are methodological differences in data collection, they are not directly comparable to BLS numbers. However, the two measures are correlated, and Gallup's employment metrics follow the general BLS trend. Gallup reports P2P and underemployment at the state level on a semiannual basis.
Gallup unemployment data -- collected daily since 2010 -- are correlated with unemployment rates reported by the BLS. Gallup's unique Payroll to Population employment measure gives a clear picture of the employment situation for the entire U.S. population, without the complexity of the frequently changing size of the workforce. When U.S. workforce size decreases, unemployment rates can actually improve, even though fewer people are working. In contrast, Payroll to Population declines when fewer people are working full time, and rises when more people find full-time work
Unlike unemployment rates, the P2P percentage provides information about economic energy. For example, increasing retirement rates, such as will happen as those in the U.S. baby boomer generation move through their 60s into their 70s, will result in a lower overall P2P value unless there is an unusually high influx of immigrants. This means fewer people are sustaining the economy or contributing to the tax base. This decline in employment, which goes undetected in traditional employment measures, could have significant consequences. Alternatively, an increase in P2P rates can lead to sustained economic growth.
Additionally, the U.S. government's BLS calculations involve seasonal and other adjustments each month. While valuable, these can mask underlying trends. Traditional unemployment metrics count Americans who are working at least one hour per week as employed. In contrast, Payroll to Population will increase or decrease only if there is a change in the number of Americans working at full-time jobs.