Gallup Finds U.S. Unemployment at 10.0% in Mid-October

[Sinuous]

Unemployment is essentially the same as the 10.1% at the end of September

by Dennis Jacobe, Chief Economist

PRINCETON, NJ -- 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.

Certain groups continue to fare worse than the national average. For example, 14.2% of Americans aged 18 to 29 and 13.8% of those with no college education were unemployed in mid-October.

Fewer Working Part Time Looking for Full-Time Employment

The percentage of part-time workers who want full-time work is at 8.6% of the workforce, not much different from the 8.7% at the end of September, but well below the 9.2% reading in the middle of last month.

Underemployment Is Declining

The decline in part-time workers wanting full-time work has led to a situation in which underemployment is declining even as unemployment is increasing. The 18.6% mid-October underemployment figure (the sum of the 10.0% unemployed and the 8.6% employed part time but wanting full-time work) is down slightly from 18.8% at the end of September and is the same as the reading in the middle of last month.

U.S. Unemployment Rate Should Increase on Nov. 5

Gallup's unemployment measure showed a sharp increase to double digits at the end of September, before seasonal adjustment. The mid-October measurement suggests the resulting double-digit unemployment rate has been maintained during the first half of the current month. In turn, this suggests that the government will report an increase in the U.S. unemployment rate for October.

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.

http://www.gallup.com/poll/143714/Gallup-Finds-Unemployment-Mid-Oct...