Economy

U.S. November Underemployment Up From a Year Ago

by Dennis Jacobe, Chief Economist

Unemployment is at 8.5%, with 9.6% working part time but seeking full-time jobs

Editor's note: This article has been updated to reflect interviewing through Nov. 30. The general conclusions remain the same.

PRINCETON, NJ -- Underemployment, a measure that combines the percentage of workers who are unemployed with the percentage working part time but wanting full-time work, is 18.1% in November, as measured by Gallup without seasonal adjustment. That is up from 17.8% a month ago and 17.2% a year ago. Many employers appear to have chosen to hire part-time rather than full-time employees for this holiday season.

Gallup's U.S. Underemployment Rate, 2010-2011

Unemployment, as measured by Gallup without seasonal adjustment, is 8.5% in November -- up slightly from 8.4% in October, but down from 8.8% a year ago. Gallup's unemployment measure suggests the government is likely to report essentially no change for November 2011 in its seasonally adjusted unemployment rate.

Gallup's U.S. Unemployment Rate, 2010-2011

An additional 9.6% of U.S. employees work part time but want full-time work, up from 9.4% in October. The current reading is significantly higher than the 8.4% of November 2010.

Percentage of U.S. Workers Working Part Time and Wanting Full-Time Work, 2010-2011

November Job Creation Index Remains Relatively Strong

Gallup's Job Creation Index for the week ending Nov. 27 is +15, based on 33% of workers nationwide saying their employers are hiring and 18% saying their employers are letting workers go. Gallup's Job Creation Index remains near its weekly high for the year (+16) and is consistent with jobless claims running below 400,000 during recent weeks. The index is far above the all-time weekly low of -11 measured in April 2009, but also below index values approaching +30 measured in early 2008, just after Gallup began tracking hiring and firing.

Job Creation Index by Week, 2010-2011

Increasing Underemployment May Imply Future Layoffs

Gallup's underemployment data suggest that today's employers are increasingly relying on part-time employees who would prefer to work full time. A year-over-year comparison shows that the 0.3-percentage-point drop in the unemployment rate is more than offset by the increase of 1.2 points in the percentage of those who work part time but want full-time work. The unemployment rate appears to have improved over the past year largely because Americans are taking part-time work when they can't get full-time jobs.

This worsening of the underemployment situation is worrisome not just because more Americans are not able to get the full-time jobs they want, but because of what it may imply about employer attitudes. Economic uncertainty may have many employers hiring part-time instead of full-time workers, and/or temporary workers instead of permanent ones. In turn, this could mean that many of those who had part-time or temporary work in November could see those jobs disappear early next year.

Friday's Government Unemployment Report

While underemployment and its potential implications for job losses early next year may deserve more attention, the focus this Friday is likely to be on the unemployment rate. Earlier this month, Gallup reported that the deterioration in November unemployment was likely the result of seasonal factors. This implies that the government is likely to report Friday that there was no change in the seasonally adjusted U.S. unemployment rate for November.

Gallup's November unemployment data are generally consistent with the modest improvement seen in the U.S. economy recently and the Challenger, Gray, & Christmas report that job-cut announcements were down 0.7% in November from October. However, this level of unemployment is less optimistic than might be implied by Gallup's Job Creation Index for the first three weeks of the month, and by the ADP Employer Services report that 206,000 private-sector jobs were created in November.

It might be that the ADP report registered in November some of the job improvement Gallup picked up in October. Further, some employers may be seeing stronger holiday sales and are adding to their hiring in response. Whether the same lagged recognition will happen when the government provides its business-based unemployment report is unclear.

Regardless, the modest recent improvement in the U.S. economy so far seems strong enough to keep the unemployment situation from deteriorating further, but not powerful enough to create the jobs needed to lower the unemployment rate. It remains to be seen whether Wednesday's efforts of the world's central banks to flood the world with liquidity and stimulate the global economy will change this situation.

How Gallup's Unemployment Measure Differs From the U.S. Government's Measure

Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Complete trend data are always available to view and export in the following charts:

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

Read more about Gallup's economic measures.

View our economic release schedule.

Survey Methods

Gallup classifies American workers as underemployed if they are either unemployed or working part time but wanting full-time work. The findings reflect more than 18,000 phone interviews with U.S. adults aged 18 and older in the workforce, collected over a 30-day period. Gallup's results are not seasonally adjusted and are ahead of government reports by approximately two weeks.

Results are based on telephone interviews conducted as part of Gallup Daily tracking from Nov. 1-29, 2011, with a random sample of 18,416 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 sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. 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, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 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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