U.S. Unemployment Ticks Down to 7.6% in Mid-December

U.S. Unemployment Ticks Down to 7.6% in Mid-December
U.S. unemployment, as measured by Gallup without seasonal adjustment, is 7.6% in mid-December, improved slightly from 7.8% in November. Gallup's seasonally adjusted unemployment is 7.8% in December, similar to the 7.7% seasonally adjusted rate the U.S. government reported for November.

These results are based on Gallup Daily tracking interviews, conducted by landline and cellphone, with approximately 30,000 Americans from Nov. 16-Dec. 15 -- 67.0% of whom are active in the workforce. Gallup calculates the seasonally adjusted unemployment rate by applying the adjustment factor the government used for the same month in the previous year -- in this case, +0.2 percentage points in December 2011. Gallup's rolling 30-day survey period differs significantly from the reference period the government's monthly reports use, which is one week in the first half of the month.

Underemployment, as measured without seasonal adjustment, is 17.3% in mid-December, essentially the same as 17.2% of November. Gallup's U.S. underemployment measure combines the percentage of workers who are unemployed in the workforce with the percentage of those working part time but looking for full-time work.

The decline in the mid-December 30-day unemployment rate was offset by an increase in the number of part-timers wanting full-time work, which was at 9.7% in mid-December, up from 9.4% in November.

Quality Job Perceptions Experience Sharp Decline

Americans' perceptions of the quality job climate worsened significantly in December, despite the general stability in the unemployment and underemployment rates. The percentage of Americans saying now is a good time to find a quality job fell sharply to 19% in December from a post-recession/financial crisis high of 24% in November. Three in four Americans (76%) continue to say this is a bad time to find a quality job. The record high for this measure came in January 2007, when 48% said it was a good time to find a quality job.

Implications

Gallup Daily tracking data for the 30 days ending on Dec. 15 suggest that the U.S. unemployment situation is largely unchanged in December. As a result, the government in early January seems likely to report little change in the seasonally adjusted unemployment rate for December. Of course, such a projection assumes that the labor force will not show another sharp decline as was the case in November, or significant growth counterbalancing last month's decline.

Many Americans are settling for part-time jobs as 2012 comes to an end because they cannot find full-time work. The slight downtick in the unemployment rate was offset by an uptick in the percentage working part time, but wanting full time work. While part-time work is better than no work -- and even part-time jobs may be harder to get after the holidays -- such jobs do not provide the basis for forming new households or building experience in a quality job.

Indeed, a separate Gallup survey finds Americans becoming more pessimistic about their ability to find a quality job. Fewer Americans say now is a good time to find a quality job than was the case just a month ago. Like full-time work, the availability of quality jobs is key to economic growth.

At last week's Federal Open Market Committee meeting, the Fed suggested that it would keep interest rates low until the unemployment rate reached 6.5%. Further, the FOMC implied that achieving this goal could take until mid-2015. Gallup's data suggest that the Fed should not just target monetary policy based on the unemployment rate, but should also take into account the quality of the jobs available and the percentage of the entire population that works full time for an employer.
From: http://www.gallup.com
Updated: December 20, 2012