A Gallup poll shows underemployment is holding steady at 18.4%, a couple points higher than the BLS number from Friday’s jobs report.
Please consider U.S. Underemployment Steady at 18.4% in July
Underemployment, as measured by Gallup, was 18.4% in July, essentially unchanged from 18.3% at the end of June and in mid-July. Underemployment peaked at 20.4% in April.
Gallup’s underemployment measure includes both Americans who are unemployed and those working part time but wanting full-time work. It is based on more than 17,000 phone interviews with U.S. adults aged 18 and older in the workforce, collected over a 30-day period and reported daily and weekly. Gallup’s results are not seasonally adjusted, and tend to be a precursor of government reports by approximately two weeks.
Substantially Higher Underemployment Persists Among the Young
Americans aged 18 to 29 had easily the highest underemployment rate in July of any age group, at 28.4%, including 11.8% who were unemployed and 16.6% who were employed part time but wanted full-time work. Among all U.S. adults in the workforce, a higher percentage of women than of men are underemployed.
Underemployed Are Less Hopeful
The percentage of underemployed Americans who are “hopeful” that they will be able to find a job in the next four weeks fell to 40% in July — down from the better levels of May (43%) and June (42%).
Gallup reports higher levels of underemployment but slightly lower levels of unemployment than does the BLS. The lower unemployment level (8.9% Gallup vs. 9.5% BLS) likely stems from seasonal variations (the BLS seasonally adjusts numbers, Gallup does not).
Notably, Gallup is consistently higher by a large margin on underemployment for the entire year. Seasonal adjustments cannot account for the over 2% points difference.
Here is the pertinent table as discussed in Jobs Decrease by 131,000, Rise by 12,000 Excluding Census; Unemployment Steady at 9.5%; June Revised from -125,000 to -221,000
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
click on chart for sharper image
Looking ahead, there is no driver for jobs. Moreover, states are in forced cutback mode on account of shrinking revenues and unfunded pension obligations. Shrinking government jobs and benefits at the state and local level is a much needed adjustment. Those cutbacks will weigh on employment and consumer spending for quite some time.
Expect to see structurally high unemployment for years to come.
Mike “Mish” Shedlock
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