US: Gallup US Payroll to Population

Thu Oct 01 12:00:00 CDT 2015

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level 45.3% 45.3%


The U.S. Gallup Good Jobs rate was 45.3 percent in September. This is the same as the rate measured in August, and the highest Gallup has measured for any September since tracking began in 2010. The good jobs rate has declined every September from the level measured in August since Gallup began tracking employment in 2010. The fact that the rate did not decline this past month represents a small diversion from seasonal trends in the direction of higher full-time employment.

The percentage of U.S. adults participating in the workforce in September was 67.5 percent. This is up from the rate measured in August 2015 (66.9 percent) and in September of last year (67.2 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 since mid-2013, it has typically remained below 67.0 percent. Workforce participation is defined as 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.

The unadjusted U.S. unemployment rate was 6.3 percent in September, steady with August's 6.3 percent and down three-tenths of a percentage point from the rate measured in September 2014. After years of gradual decline, Gallup's unemployment measurement has not substantially changed from the rate measured a year ago, apart from a temporary seasonal spike in January. 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 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.