The U.S. Payroll to Population employment rate (P2P was 44.5 percent in May. This is up 0.6 percentage points from the previous month and is identical to the rate measured in May 2014. It represents the strongest month-to-month change for P2P so far this year, in line with an expected seasonal rise in full-time employment.
The percentage of U.S. adults participating in the workforce in May was 66.8 percent. While up from April, this is equal to the March reading. However, it is still 0.8 points lower than the rate measured in May 2014 which was 67.6 percent. Since January 2010, the workforce participation rate has remained in a narrow range, from a low of 65.8 percent to a high of 68.5 percent, but in the past two years it has most often remained below 67.0 percent.
Gallup's unadjusted U.S. unemployment rate remained at 6.1 percent in May, near the low point in Gallup's five-year trend marked by the 5.8 percent measured in December 2014. 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.
Unlike Gallup's P2P rate which is a percentage of the total population, the unemployment rates that both Gallup and the U.S. Bureau of Labor Statistics report are percentages within the labor force. While both Gallup and BLS data are based on robust surveys, the two have important methodological differences. Additionally, the most-discussed unemployment rate released by the BLS each month is seasonally adjusted. Although Gallup's employment numbers strongly correlate with BLS rates, the BLS and Gallup estimates of unemployment do not always track precisely on a monthly basis.
Gallup's measure of underemployment in May is 14.7 percent, the lowest level recorded since Gallup began tracking it daily in 2010. Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed and those who are working part time but desire full-time work. The gradual decline in Gallup's underemployment measure has been driven almost entirely by a decline in unemployment, but this month, the 0.2-point decrease was attributable entirely to a lower rate of part-time workers who would rather be working full time.
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.