Workforce participation falls to 66.5%
WASHINGTON, D.C. -- The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, was stable in July. The 45.1% of Americans employed full time for an employer in July is similar to the 45.0% in June and is one of the highest rates recorded since Gallup started tracking P2P in January 2010.
Gallup's P2P metric tracks the percentage of the U.S. adult population aged 18 and older who are employed 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 July P2P rate tends to be one of the higher measurements annually, but this July's rate is still higher than scores recorded in July in past years.
The latest results are based on Gallup Daily tracking interviews with approximately 28,400 Americans, conducted July 1-29 by landline telephone and cellphone. Gallup does not count adults who are self-employed, work less than 30 hours per week, are unemployed, or are out of the workforce as payroll-employed in the P2P metric. This month's figures exclude July 30-31 because of reporting deadlines.
Workforce Participation Declines to 66.5%
While P2P has been rising this year, from 42% in January to slightly higher than 45% in July, workforce participation has recently fallen to 66.5%, reversing recent gains and reverting to the downward trajectory seen in the past four years. Gallup defines the "workforce" as adults who are working or who are not working but actively looking for work and available for employment.
Unlike Gallup's P2P rate, which is a percentage of the total population, traditional employment metrics -- such as the unemployment rates that Gallup and the U.S. Bureau of Labor Statistics (BLS) report -- are percentages of the workforce. At 66.5%, the U.S. workforce participation rate in July 2014 was down from 67.4% recorded in June and from the 67.7% in July 2013.
Workforce participation has been on a downward trajectory since Gallup began measuring it in 2010. This trend is broadly in line with figures that the BLS tracks, which show a similar overall reduction in the workforce over the same period. Interestingly, while the decline in workforce participation is often attributed to increasing retirement as the U.S. population ages, the downward trend is actually present within all age cohorts, and most dramatically among those who are in their prime working years.
Unadjusted Unemployment Drops to New Low
Gallup's U.S. seasonally unadjusted unemployment rate for July was 6.4%, down from 6.8% in June -- marking the lowest monthly rate Gallup has measured since it first began tracking employment in January 2010. In this same month in previous years, Gallup measured unemployment rates of 7.8% in 2013 and 8.2% in 2012. Gallup's U.S. unemployment rate represents the percentage of adults in the workforce who did not have any paid work in the past seven days, for an employer or themselves, and who were actively looking for and available to work.
Underemployment Also Registers New Low in Gallup Trend
Gallup's measure of underemployment was 15.1% in July. This is down from 15.8% in June and from 17.3% in July 2013, and it is the lowest that Gallup has recorded since beginning the measurement in 2010. Gallup's U.S. underemployment rate includes adults in the workforce who are unemployed (6.4%) and those who are working part time but desire full-time work (8.7%).
The long-term trends in Gallup's P2P and unemployment measures remain positive, with the P2P employment rate nearing its four-year high while the unemployment rate is the lowest it has been since Gallup began tracking it.
However, declining workforce participation is worrying, and does seem to be holding down Gallup's P2P measurement to some degree. While higher rates of retirement would be expected as more and more of the baby boomer generation reaches retirement age, the declines among those in their prime working years point to other factors driving this trend. Even as more Americans are finding full-time employment -- the percentage of adults in the workforce who are employed full time by an employer is at a five-year high -- a growing contingent of U.S. adults appear to have given up or opted out.
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:
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Results for this Gallup poll are based on telephone interviews conducted July 1-29, 2014, on the Gallup Daily tracking survey, with a random sample of 28,386 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, the margin of sampling error is ±1 percentage point at the 95% confidence level.
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, and cellphone mostly). 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.