U.S. Payroll to Population Rate Increases Slightly in October

U.S. Payroll to Population Rate Increases Slightly in October

by Ben Ryan

Unemployment rate continues its slow decline

WASHINGTON, D.C. -- The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, rose slightly to 43.8% in October, from 43.5% in September. P2P in 2013 continues to lag behind 2012; P2P last month is down almost two percentage points from the 45.7% found in October 2012.

U.S. Payroll to Population Employment Rates, January 2010-October 2013

Because of seasonal fluctuations, year-over-year comparisons are often helpful in evaluating whether monthly changes are attributable to seasonal hiring patterns or true growth (or deterioration) in the percentage of people working full time for an employer. While the P2P rate for October 2013 is down from the same month last year, P2P was higher in October 2012 than in any other month since Gallup began tracking the metric in January 2010.

P2P in 2012 trended higher than in 2010-2011, especially in the last few months before Election Day, but fell sharply beginning in November. Average monthly P2P this year (43.9%) is now higher than it was in 2010 (43.5%) and 2011 (43.6%), but below the 2012 average of 44.4%.

U.S. Payroll to Population Employment Rates, January 2010-October 2013

Gallup's P2P metric estimates the percentage of the U.S. adult population aged 18 and older who are employed full time by an employer for at least 30 hours per week. P2P is not seasonally adjusted.

These results are based on Gallup Daily tracking interviews with approximately 30,000 Americans, conducted Oct. 1-30 by landline and cellphone. Gallup does not count adults who are self-employed, working part time, unemployed, or out of the workforce as payroll-employed in the P2P metric. Full-time self-employment is at 5.2% in October, statistically unchanged from 5.3% in September but up from 4.8% in October 2012. Although self-employment has increased over last year, the uptick doesn't explain all of the nearly two-point decline in the P2P rate.

Seasonally Unadjusted Unemployment 7.3% in October

Unlike Gallup's P2P rate, which is a percentage of the total population, traditional employment metrics, such as the unemployment rates Gallup and the U.S. Bureau of Labor Statistics report, are based on the percentage of the workforce. Gallup defines the "workforce" as adults who are working or actively looking for work and available for employment. The U.S. workforce participation rate in October was 67.1%, statistically unchanged from September's 67.0%, but down from 68.3% in October 2012.

Gallup's unadjusted unemployment rate for the U.S. workforce declined to 7.3% in October, from 7.7% in September, continuing a three-year trend of broad decline after a brief spike in August. Similar to P2P, unemployment fluctuates seasonally, and year-over-year change is often the most informative comparison. However, October 2012 saw a dip in the unemployment rate that was quickly followed by an almost equivalent rise the next month. Consequently, though the 7.8% average monthly unemployment rate for 2013 so far remains below the average for 2012 (8.1%), last month's unadjusted unemployment rate is up slightly from 7.0% in October 2012.

Gallup's seasonally adjusted U.S. unemployment rate for October is 7.7%, down slightly from 7.9% in September. Gallup calculates this rate by applying the adjustment factor the government used for the same month in the previous year. Last year, the government adjusted October's rate upward by 0.4 points.

Gallup Adjusted and Unadjusted U.S. Unemployment Rate Trend, January 2011-October 2013

Underemployment, as measured without seasonal adjustment, was 16.5% in October, down from 17.1% in September, but up compared with 15.9% in October 2012, which was the most positive reading in Gallup's trend. Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed with the percentage of those who are working part time but looking for full-time work.

Gallup's U.S. Underemployment Rate, Monthly Averages, 2011-2013

The percentage of part-time workers wanting full-time work was 9.2% in October, down slightly from 9.4% in September.

Percentage of U.S. Workers Working Part Time but Wanting Full-Time Work,\nMonthly Averages, 2011-2013

Bottom Line

Despite steady growth, the U.S. jobs market continues to show no signs of catching up to the pre-recession trajectory outlined in official 2007-2008 BLS data. While Gallup's P2P rate -- the percentage of all adults in the U.S. population who are employed full time for an employer -- is still slightly higher this year than three years ago, the net rise over that time has been almost imperceptible.

P2P in 2013 so far has averaged 43.9%, a net 0.4-point increase from three years ago. Over that period, the percentage of the population that is self-employed has risen to an average of 5.3% so far in 2013 from 4.8% in 2010, a 0.5-point rise. The percentage of the population that is working part time but wants full-time work has likewise risen to an average of 9.6% so far in 2013, from 9.2% in 2010, a 0.4-point increase.

This suggests that over the past three years, business hiring has continued to lag behind the demand for jobs, pushing many to risk striking out on their own or taking part-time work to make ends meet.

Gallup's seasonally adjusted U.S. unemployment rate -- the closest comparison it has to the official numbers released by the BLS -- continued its slow decline in October, in line with the basic trend measured over the last three years. Gallup data suggest that when BLS releases its October employment report on Friday, it will likely report no more than a 0.1-point decrease in the unemployment rate.

However, it is important to note that Gallup's adjusted number is based on past BLS seasonal adjustments, and those adjustments may not be the same this year. Additionally, while both Gallup and BLS data are based on robust surveys, the two have important methodological differences. Thus, although Gallup's employment numbers are highly correlated with BLS rates, Gallup's numbers tend to have more month-to-month variability, and the unemployment rate as reported by the BLS each month does not always track precisely with the Gallup estimate.

Gallup's U.S. Unemployment Measures, October 2013

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, 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

Results for this Gallup poll are based on telephone interviews conducted Oct. 1-30, 2013, on the Gallup Daily tracking survey, with a random sample of 30,757 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

For results based on the total sample of national adults, one can say with 95% confidence that the 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 of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by region. Landline and cell telephone 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 to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to match the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, and cellphone mostly). Demographic weighting targets are based on the March 2012 Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the July-December 2011 National Health Interview Survey. Population density targets are based on the 2010 census. All reported margins of sampling error include the computed design effects for weighting.

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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