Economy

Underemployment Holds at 18.3% in Mid-July

by Dennis Jacobe, Chief Economist

Unemployment rose to 9.3%; part-time workers wanting full-time work fell to 9.0%

PRINCETON, NJ -- Underemployment, as measured by Gallup, is 18.3% in mid-July, unchanged from the end of June and remaining at its lowest level of the year.

Underemployment, January-July 15, 2010

Gallup's underemployment measure includes 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.

Changes in Unemployed, Part-Time Workers Wanting Full-Time Work Offset

The unemployment rate component of Gallup's underemployment measure increased marginally to 9.3% in mid-July. This marginal increase was offset by an equally modest decline to 9.0% in the number of employees working part time but wanting full-time work -- leaving underemployment unchanged in mid-July.

Underemployment Components, January-July 15, 2010

Younger, Less Educated Face High Underemployment

A greater percentage of women than of men are underemployed. Americans 18 to 29 have the highest underemployment level by age, at 29.6%; the highest unemployment rate, at 13.3%; and the highest percentage of those employed part time wanting full-time work, at 16.3%.

 Underemployment and Components, by Gender and Age, July 15, 2010

Workers without any college education have the highest underemployment by education, the highest unemployment rate, and the highest percentage of those working part time but wanting full-time work.

Underemployment and Components by Education, July 15, 2010

Many Underemployed Remain Hopeful

Despite all of the recent negative economic news concerning jobs and the economy, 43% of underemployed Americans are "hopeful" that they will be able to find a job in the next four weeks -- tied with the 2010 high. Perhaps these job seekers recognize that companies continue to hire -- even in a so-called jobless recovery.

Percentage Hopeful of Finding a Job in the Next Four Weeks

Assessing the Job Market

Gallup's underemployment findings suggest that little has changed in mid-July compared with the end of June. As a result, Gallup expects the government to report no change in the July unemployment rate on the first Friday of August.

Still, the current jobs picture, as a whole, is difficult to assess with any precision. The government hired and then let go hundreds of thousands of census workers. And General Motors is not instituting its usual summer plant shutdowns this year -- something that may have played a part in the sharp drop in jobless claims reported last Thursday. The combination of these and other circumstances makes it particularly challenging to determine and apply seasonal factors in today's economic environment.

Further, former Federal Reserve Chairman Alan Greenspan recently noted that the economy seemed to hit an invisible wall in June. The Federal Open Market Committee's June minutes show that the Fed reduced its growth forecast for the U.S. economy; and retail sales fell for the second month in a row in June. The Empire State Manufacturing Survey and the Philadelphia Fed survey reports were disappointing as well. Add in the lingering financial difficulties in Europe, and it is not hard to see how potential employers might be holding back before committing to an expansion of their workforces.

A continued lack of job growth is not good news for retailers as the back-to-school season approaches -- or for politicians as they face the voters this November. However, probably the most troubling aspect of this mid-July report is the high levels of underemployment among the younger (29.6%) and the less educated (23.9%). Addressing this situation should be the first priority of America's leaders.

Gallup Daily tracking will provide continuous monitoring of the jobs situation in the weeks and months ahead.

Daily: Employment, Economic Confidence and Job Creation, Consumer Spending
Weekly: Employment, Economic Confidence, Job Creation, Consumer Spending

Read more about Gallup's economic measures.

Survey Methods

Results are based on telephone interviews conducted as part of Gallup Daily tracking June 16-July 15, 2010, with a random sample of 17,894 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.

For results based on the total sample of national adults, 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 and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each daily sample includes a minimum quota of 150 cell phone respondents and 850 landline respondents, with additional minimum quotas among landline respondents for gender within region. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, cell phone-only status, cell phone-mostly status, and phone lines. Demographic weighting targets are based on the March 2009 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

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.

For more details on Gallup's polling methodology, visit www.gallup.com.

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