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Monday, January 10, 2011

Real Unemployment in U.S. Above 19%

Gallup's continuous measurement of the U.S. unemployment rate shows it at 9.7% for the 30-day average ending Jan. 8, 2011. This is only 0.6% below the rate registered on this same date a year ago and reflects how hard it is to make progress when trying to reduce the unemployment rate.

However, Gallup's underemployment -- real unemployment -- including those unemployed and those employed part-time but looking for full-time work, remains at 19.2% for the 30-days ending Jan. 8, 2011. This is down 0.4% from the same day in January 2010 and suggests nearly one in five Americans need a full-time job as 2011 begins -- just as they did a year ago.

Gallup's job data for early January 2011 suggest jobs remain the top national priority of the new year.

Friday, January 7, 2011

Job Numbers May Already Be Out of Date

The government once again surprised everyone on Friday when it reported that the unemployment rate fell to 9.4% in December from 9.8% in November. Of course, this follows on the government's surprising report that the unemployment rate increased to 9.8% in November from 9.6% in October. In contrast, Gallup's monitoring of the job situation showed a drop in the unemployment rate in November and an increase in December.

One of the key reasons for these differences has to do with timing. While the government's unemployment rate reflects conditions at the middle of the month -- Gallup's reflects daily survey responses throughout the month. As a result, it appears the government may simply be trailing behind -- picking up on the job improvement of November in December -- and yet to pick up on the job deterioration taking place in later December. Of course, the way the government seasonally adjusts the unemployment data -- while Gallup does not -- also creates differences with Gallup's measurements tending to better reflect what is actually happening in the job market.

Regardless, Gallup's job data tend to support Fed Chairman Ben Bernanke's suggestion in his Friday testimony that there is a long way to go before the economy begins producing enough jobs to significantly lower the U.S. unemployment rate.

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