U.S. Payroll to Population Rate Falls to 42.0% in January
Economy

U.S. Payroll to Population Rate Falls to 42.0% in January

by Ben Ryan

Labor force participation rate rises to 66.2%

WASHINGTON, D.C. -- The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, continued its recent decline in January, dropping to 42.0% from 42.9% in December. This is the lowest level for P2P since March 2011, when it was 41.9%.

U.S. Payroll to Population Employment Rates, January 2010-January 2014

Gallup's P2P metric tracks the percentage of the U.S. adult population aged 18 and older that is employed full time by an employer for at least 30 hours per week. P2P is not seasonally adjusted. However, 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. The P2P rate for January 2014 is down 1.6 percentage points from the 43.6% found in the same month last year and in January 2012.

The latest results are based on Gallup Daily tracking interviews with approximately 30,000 Americans, conducted Jan. 2-31, 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.

Seasonally Adjusted Unemployment 8.0% in January

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 January was 66.2%, up slightly from December's 65.8% but still down from 68.1% in January 2013.

Gallup's seasonally adjusted U.S. unemployment rate for January, using an estimate of the government's likely adjustment factor, is 8.0%, up from 7.6% in December. 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 January's rate downward by 0.6 points. The exact adjustment the government uses for January 2014 will not be known until Friday's BLS release.

Gallup Adjusted and Unadjusted U.S. Unemployment Rate Trend, January 2011-January 2014

Underemployment, as measured without seasonal adjustment, was 18.6% in January, up from 17.2% in December, and up from 17.5% in January 2013. Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed (8.6%) with the percentage of those who are working part time but looking for full-time work (10.0%). An increase in unemployment mainly explains the increase in underemployment vs. December, partly attributable to more out-of-work Americans now reporting they are looking for work.

Gallup's U.S. Underemployment Rate, Monthly Averages, January 2011-January 2014

Bottom Line

The overall percentage of the U.S. adult population that was employed full time for an employer dropped in January to 42.0%, its lowest point since March 2011. Further, despite a rise in labor force participation in January, the 33.8% of all Americans who were not in the workforce is high compared with the rates Gallup has found over the past four years. The combination of falling P2P and the modest increase in the labor force -- attributable to more out-of-work Americans looking for work -- pushed unemployment up by more than a full point, from 7.4% to 8.6%, without adjusting for seasonal variations.

While both Gallup and BLS data are based on robust surveys, the two have important methodological differences. Although Gallup's employment numbers highly correlate with BLS rates, Gallup's numbers tend to have more month-to-month variability, and the unemployment rate that BLS reports each month does not always track precisely with Gallup's estimate.

Gallup's U.S. Unemployment Measures, January 2014

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, 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 Jan. 2-31, 2014, on the Gallup Daily tracking survey, with a random sample of 30,493 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 time zone within region. Landline and cellular 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, cellphone mostly, and having an unlisted landline number). Demographic weighting targets are based on the most recent Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the most recent National Health Interview Survey. Population density targets are based on the most recent U.S. 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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