Gallup's U.S. Job Creation Index maintained its record high of plus 32 in July for the third month in a row. This score is based on 43 percent of workers saying their employer is hiring workers and expanding the size of its workforce. It also includes 11 percent who say their employer is letting workers go and reducing the size of its workforce. Both of these are the same as in June.
After hitting a record low of minus 5 in early 2009, it remained negative or close to zero for the rest of that year. Gradually, the index improved, eventually reaching a high of plus 30 in September 2014. After hovering between plus 27 and plus 29 from October 2014 to March 2015, the index climbed two points in April and another point in May to reach the high that it has sustained over the last two months.
Net hiring in the private sector ticked up a point from the previous month -- from plus 32 in June to plus 33 in July, based on 43 percent of private-sector workers saying their employer is hiring and 10 percent saying their employer is letting workers go. Meanwhile, government hiring came down a few points. In both May and June, government workers reported net hiring of plus 25, but last month this dipped to plus 22, as 39 percent of government workers reported a net gain and 17 percent a net loss of jobs at their place of employment. Nongovernment workers make up the large majority of U.S. employees, so the smaller increase in net hiring among private-sector employees last month offset the larger decrease among government employees.
Gallup's Job Creation Index is based on a question that Gallup tracks daily, asking a nationally representative sample of 500 to 600 working adults, aged 18 and older, and reports monthly based on approximately 14,000 interviews. Gallup asks its sample of employed Americans each day whether their companies are hiring new people and expanding the size of their workforces, not changing the size of their workforces, or letting people go and reducing the size of their workforces. The resulting index -- computed on a daily and a weekly basis by subtracting the percentage of employers letting people go from the percentage hiring -- is a real-time indicator of the nation's employment picture across all industry and business sectors. The survey is conducted with respondents contacted on landlines and cellphones.
The hiring and firing trends that are the basis for Gallup's Job Creation Index provide key new insights into the potential future direction of job market conditions. Gallup's Job Creation Index provides information not available in some government indicators. For example, the government's weekly new jobless claims measure only reflects workers filing for benefits, yet not everyone who is laid off files for unemployment. The index may also detect hiring trends days or weeks before they are manifested in the official unemployment rate or other lagging indicators. Gallup has tracked its Job Creation Index daily since January 2008.
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