Underemployment rose to 19.0% in December from 17.2% at the end of November
By Dennis Jacobe, Chief Economist
PRINCETON, NJ – Unemployment, as measured by Gallup without seasonal adjustment, increased to 9.6% at the end of December — up from 9.3% in mid-December and 8.8% at the end of November.
Meanwhile, the percentage of part-time workers who want full-time work increased to 9.4% of the workforce in December — up from 9.2% in mid-December and 8.4% at the end of November.
Underemployment at 19.0% in December
The increase in Gallup’s U.S. unemployment rate and the worsening in the percentage of part-time workers wanting full-time work combined to raise underemployment to 19.0% in December from 18.5% in mid-December and 17.2% at the end of November.
The U.S. unemployment picture may seem unusually confusing these days. Gallup monitoring showed a sharp improvement in the jobs situation in November, particularly as companies added holiday workers. However, the government surprised Gallup and most other economic observers as it reported last month that the U.S. unemployment rate increased to 9.8% in November. It appears that the government made a larger seasonal adjustment than was generally anticipated for the month.
ADP on Wednesday reported that the economy added 297,000 private-sector jobs — far above the consensus expectation that the government on Friday will report the U.S. economy added 140,000 new jobs overall in December. In contrast, Gallup shows the unemployment rate increasing as companies let go of holiday workers. At the same time,
Gallup’s Job Creation Index shows monthly average hiring and firing conditions essentially unchanged over the past three months. Because the Gallup unemployment measure is not seasonally adjusted, it tends to more accurately reflect what is actually taking place in the U.S. job market – and may not agree with the government’s estimate that is seasonally adjusted.
Further, Gallup’s data tend to be more up-to-date than the government’s because Gallup polls on the unemployment situation continuously. Combined, seasonal adjustments and timing differences likely explain much of the disparity between Gallup’s measures of underemployment and unemployment, compared with those reported by others.
Whatever the government reports about unemployment on Friday, Gallup’s U.S. underemployment data for the end of 2010 show that nearly one in five Americans continue to be unemployed or employed part-time looking for full-time work. In turn, this underscores the importance of job creation as a top national priority.
Dr. Pinna says:
One in five unemployed will be considered a very good picture of unemployment in the future. The U.S. has become a member of the Latin American countries, and chronic unemployment in these countries verges on 30 to 50 percent.
The U.S. economic structure is based on history, not on reality. Big spending will remain, but big income from a robust work force is already gone. Prices are rising around the world for food and energy.
This will impact the American worker in a very painful way.