Gallup: Underemployment Falls to 18.9% in April

by Dennis Jacobe, Chief Economist

Unemployment falls to 9.7%; part-time workers wanting full-time, to 9.2%

PRINCETON, NJ -- More than 2 million Americans became fully employed in April, as Gallup's "underemployment" rate fell 1.4 points to 18.9% -- the lowest level for this new measure since Gallup began tracking it in December 2009. While part of this improvement is the result of the normal pickup in hiring at this time of year -- and the addition of temporary census workers -- it is good news both for those becoming fully employed and for the economy as a whole.

Underemployment in U.S. Workforce, December 2009-April 2010

Gallup's underemployment measure includes both the 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. Gallup results are not seasonally adjusted and tend to be a precursor of government reports by approximately two weeks.

Fewer Are Unemployed or Part-Time Wanting Full-Time Work

April saw improvements in both components of the underemployment rate. Gallup's unemployment rate (not seasonally adjusted) declined to 9.7% in April from 10.4% in March, while the percentage of those working part-time who want full-time work fell to 9.2% from 9.9%.

Underemployment Components, U.S. Workforce, December 2009-April 2010

Fewer Underemployed, but No Increase in Hope

Despite the brighter jobs picture, Americans who remain underemployed are no more hopeful now that they will soon find work than they have been at any time this year. Sixty percent of the underemployed say they are not hopeful of finding a job in the next four weeks. This continued pessimism is consistent with many Americans' fears that they may lose their current jobs over the next 12 months.

January-April 2010 Trend: Percentage Not Hopeful of Finding a Job in the Next Four Weeks

Looking Ahead to Friday's Unemployment Report

On Friday, the government is likely to report a more modest improvement in job market conditions than is reflected by Gallup's underemployment measure. In part, this results from seasonal adjustments. Gallup does not seasonally adjust its results, preferring to reflect actual results without adjustments. Because hiring tends to increase in April, seasonal adjustments will tend to moderate any improvement in the government's report.

Further, Gallup's underemployment rate is a broader measure of job market conditions. For example, underemployment measures the improvement in market conditions that takes place as employers leverage their existing employees so they become fully employed or employed to capacity.

Importantly, Gallup's measure is also more timely than the measure the government reports. Friday's jobs report will reflect job conditions as of mid-April, while Gallup's includes results up to the last day of the month.

Regardless, Friday's jobs report is likely to show that the nation has a long way to go before it can make significant progress in changing the current job market psychology -- increasing the hope of finding a job while simultaneously reducing the fear of losing one.

Review and export the complete daily trends on these measures: Economic Indexes; Consumer Spending; Economic Outlook; Economic Conditions; Job Market; U.S. Workforce

Learn more about Gallup's economic measures.

Survey Methods

For Gallup Daily tracking, Gallup interviews approximately 1,000 national adults, aged 18 and older, each day. Gallup's underemployment results are based on more than 17,000 telephone interviews completed on a 30-day rolling basis. For these results, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.

Interviews are conducted with respondents on landline telephones (for respondents with a landline telephone) and cellular phones (for respondents who are cell phone only).

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
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