Gallup's U.S. Job Creation Index averaged plus 32 in October, the sixth month in a row in which the index has held at this level. This is the highest index score since Gallup began measuring employees' perceptions of job creation at their workplaces in 2008.
When Gallup began measuring job creation in January 2008, the index measured a healthy plus 26. But it quickly fell, including substantial drops in the fourth quarter of 2008 after the start of the financial crisis. The index hit a nadir of minus 5 in early 2009, and has slowly rebounded since.
In October, 43 percent of workers said their employer was hiring workers and expanding the size of its workforce, and 11 percent said their employer was letting people go and reducing the size of its workforce, resulting in the index score of plus 32. Forty percent of workers say their employer is "not changing" the size of its workforce. These percentages have been steady for the last several months. Since April, a higher percentage of Americans have said their employer is "hiring" than have said the size of their workforce is "not changing."
No regions had significant changes in perceptions of hiring in October compared with September. Net hiring continues to be lowest in the East, at plus 28, as has generally been the case since 2013. Hiring perceptions were similar in the Midwest (plus 34), South (plus 33) and West (plus 33). Although steady between September and October, hiring in the Midwest has dropped from plus 36 in August, which tied the highest score recorded for any region since Gallup began tracking this metric.
Hiring perceptions were steady in both the private sector and among government workers. Net job creation measured plus 34 among nongovernment workers, where the majority of the country is employed, and plus 27 among government workers.
The current plus 32 index comes at a time when unemployment remains low, with the Bureau of Labor Statistics reporting 5.1 percent unemployment. This is not as good as the rates near 4.0 percent in 1999 and 2000, but it is one of the better rates in recent times. Even looking at the states with the highest rates of job creation -- such as North Dakota -- their indexes in 2014 were only slightly higher than the current score for the country as a whole. One future driver of expanded job creation could be more entrepreneurial activity and new business startups, as the number of new businesses being started recently is less than the number that are closing, according to the Brookings Institute. All in all, it is a positive sign that job creation continues at this high point, but it does invite speculation about just how much higher the index can climb.
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.