US: Gallup Good Jobs Rate

February 2, 2017 07:30 CST

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The January Gallup Good Jobs (GGJ) rate was 44.8 percent, up one-tenth of a point from 44.7 percent in December. While this is not a statistically significant increase, the current rate is the highest for any January since tracking the measure began in 2010. One year ago this month, the U.S. GGJ rate was 44.7 percent.

The percentage of U.S. adults who participated in the workforce in January in any capacity -- by working full time, working part time, or not working but actively seeking and being available for work -- was 67.4 percent. This was up almost a full percentage point from 66.5 percent in December and is statistically even with the rate measured in November 2016 (67.5 percent).

Gallup's unadjusted U.S. unemployment rate in January was 5.8 percent, up from 5.2 percent in December, and 4.9 percent in November 2016 -- the lowest rate Gallup has recorded. 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 January was 14.1 percent, up from 13.7 percent in December, and 1.4 points higher than the low point measured in October 2016 (12.7 percent). Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed (5.8 percent) with those who are working part time but desire full-time work (8.3 percent).

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.