US: Gallup Good Jobs Rate

Thu May 04 07:30:00 CDT 2017

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The Gallup good jobs rate fell to 44.7 percent in April, down from 45.1 percent in March, but higher than the 44.4 percent measured in February. The current GGJ rate is slightly lower than the 44.9 percent recorded in April 2016.

While the GGJ has fluctuated on a monthly basis since Gallup first began tracking the measure in January 2010, it has generally trended up. The low point for the GGJ was 41.7 percent in February 2011, as the economy struggled to recover from the Great Recession and the high unemployment rate that followed. The highest point was 47.1 percent in July 2016.

The U.S. workforce participation rate essentially held steady at 67.6 percent in April, little changed from 67.8 percent in March. The rate is roughly the same as a year ago, when workforce participation was 67.3 percent. The unemployment rate for April was 5.5 percent, essentially unchanged from the 5.6 percent recorded in February and March.

The percentage of the population who is underemployed rose to 14.0 percent in April, up from 13.5 percent last month. The current underemployment rate is roughly equal to that of January (14.1 percent) and February (13.9 percent), as well as a year ago (13.8 percent). Underemployment is still far better than its high point of 20.3 percent recorded in March 2010.

Gallup tracks daily the employment status of the U.S. population and the workforce. Based on an individual's responses to the question series, 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. The data are based on a nationally representative sample of 29,000 interviews, including 18,000 in the workforce. Daily results reflect 30-day rolling averages.

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.