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. Labels: government jobs report, jobs, unemployment, unemployment rate