US: Gallup Good Jobs Rate

Thu Mar 31 07:30:00 CDT 2016

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The Gallup Good Jobs (GGJ) rate was 44.4 percent in March. This was down slightly from the February rate (44.6 percent) but higher than the rate in any March since Gallup began measuring it in 2010. The current rate is 0.3 percentage points higher than in March 2015, suggesting an underlying increase in full-time work beyond seasonal changes in employment. The percentage of U.S. adults in March who participated in the workforce was 67.0 percent. This was down slightly from the rate in February (67.2 percent) but still higher than the 66.9 percent average workforce participation rate since June 2013.

Gallup's unadjusted U.S. unemployment rate was 6.0 percent in March, down slightly from February's 6.2 percent. It is the lowest rate in any March since Gallup began tracking the measure in 2010, including last year's 6.4 percent. March underemployment was 14.5 percent, down slightly from February (14.7 percent) but in line with the rates since April 2015. The current underemployment rate of 14.5 percent is the lowest Gallup has measured in any March over the past seven years.

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.