The good jobs (GGJ) rate was 44.7 percent in December, down from 45.7 percent in November. While the GGJ rate often declines somewhat in December, this represents the first month with a year-on-year decrease since April 2014. The U.S. GGJ rate was 45.3 percent in December 2015.
The December GGJ rate is down from the record high of 47.1 percent in July. GGJ typically peaks in June and July with summer employment and then drops in the fourth quarter, with a limited uptick in October. November's 0.7-percentage-point decrease to 45.7 percent fit this pattern, but the one-point drop in December is large relative to Decembers in the past several years.
The percentage of U.S. adults who participated in the workforce in December in any capacity -- by working full time, working part time, or not working but actively seeking and being available for work -- was 66.5 percent, down a full point from 67.5 percent in November and the lowest recorded since April 2015.
Gallup's unadjusted U.S. unemployment rate in December was 5.2 percent, edging up from 4.9 percent in November. 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, either for an employer or for themselves, and who were actively looking for and available to work.
Gallup's measure of underemployment in December was 13.7 percent, up half a point from 13.2 percent in November, and a full point from the rate measured in October (12.7 percent). Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed (5.2 percent) with those who are working part time but desire full-time work (8.5 percent). Underemployment was roughly 20 percent when Gallup started measuring it in January 2010.
Gallup's 44.7 percent good jobs rate in December 2016 represents a decrease in GGJ beyond typical seasonal effects. This continues a decline from October, when GGJ stood at 46.4 percent, 1.7 points higher than this past month. Over the same period, workforce participation has fallen almost two points, from 68.4 percent to 66.5 percent, and involuntary part-time work has ticked up almost one point, from 7.6 percent to 8.5 percent.
The labor market typically softens in winter each year, so the direction of these changes is not unexpected. However, the past two months taken together have shown a stronger-than-average decline compared with Gallup's measurements from 2010-2015.
Gallup has seen a sharp year-end drop in GGJ of this magnitude twice before, in 2012 and 2013. After the 2012 election, GGJ fell and languished for over a year. After falling again in the final months of 2013, however, GGJ began slowly trending upward until this past month. It remains to be seen which path the GGJ will follow in 2017.
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.