U.S. OCTOBER UNEMPLOYMENT RATE SHOULD INCREASE

Based on Gallup polls, it seems that US employment has worsened since mid-September, or just after the survey period for the September employment report.

Unemployment, as measured by Gallup without seasonal adjustment, is at 10.0% in mid-October — essentially the same as the 10.1% at the end of September but up sharply from 9.4% in mid-September and 9.3% at the end of August. This mid-month measurement confirms the late September surge in joblessness that should be reflected in the government’s Nov. 5 unemployment report.

Gallup's U.S. Unemployment Rate, 30-Day Averages, January-October 15, 2010

In this regard, Gallup modeling suggests the government’s unemployment rate report for October will be in the 9.7% to 9.9% range when it is released Nov. 5. The government’s last report showed the U.S. unemployment rate at 9.6% in September on a seasonally adjusted basis, as Gallup anticipated. In addition to seasonal adjustments, the official unemployment rate is likely to be held down by a continued exodus of people from the workforce. It is easy for potential workers to become discouraged when the unemployment rate is expected to remain above 9% through the end of 2011.

In this regard, the lack of increase in Gallup’s underemployment measure when the unemployment rate is increasing would normally be a good sign for jobs and the economy. However, the current decline in the percentage of workers employed part time but looking for full-time work is not necessarily positive. It might be that some workers who are employed part time are losing their jobs — becoming unemployed or dropping out of the workforce — and are not being replaced, while new part-time workers are not being hired.

Regardless, Gallup’s employment data continue to reveal little good news for consumer spending, retailers, or the unemployed as the holidays approach.

Percentage of Americans Working Part Time and Wanting Full-Time Work, 30-Day Averages, January-October 15, 2010

Full Gallup release

 

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