Please consider U.S. Unemployment Provides Mixed Picture in Mid-April
U.S. unemployment, as measured by Gallup on a preliminary basis without seasonal adjustment, declined to 8.2% in mid-April from 8.4% in March. However, the government's likely seasonal adjustment of 0.3 percentage points leads to a Gallup seasonally adjusted U.S. unemployment rate of 8.5% in mid-April, up from 8.1% last month.Underemploymentclick on chart for sharper image
Applying the government's seasonal correction factor from April 2011 (+0.3 points) to the current mid-April data yields a seasonally adjusted estimate of 8.5% unemployment, up from March. This is much higher than the 7.9% seasonally adjusted monthly low for Gallup's U.S. unemployment rate, seen in January of this year. If it holds, it could also indicate a significant reversal in the recent downward trend of the government's seasonally adjusted unemployment rate.
Regardless, Gallup data show that unemployment is far below year-ago levels. April's preliminary unadjusted unemployment rate is down 1.2 points from April 2011 and the adjusted unemployment rate is down 1.3 points year-over-year.
Overall, it doesn't seem as if the downward trend in the seasonally adjusted unemployment rate is continuing to gain momentum, at least as of mid-April. That is, the improvement in the job situation is not as strong as last year's seasonals imply is needed to maintain the downward momentum in the unemployment rate. This is consistent with the current modest rate of overall economic growth. It also leaves the unemployment rate exposed to further increases if the U.S. workforce grows substantially in the months ahead because job growth may not accelerate.
Big Discrepancy in Alternate Measures
While the base unemployment number between the BLS and Gallup is converging, for now, alternate measures of unemployment that include part-time workers seeking but not finding full-time work are not.
Gallup reports 18.1% underemployment, while the BLS has the number at 14.5%.
Because of disability fraud and middle-aged job seekers going back to school, I think the base unemployment figures of 8.2% to 8.5% by Gallup and the BLS are on the low side by at least a point.
From the standpoint of workers covered by unemployment benefits, the number is even higher. Please see Trends in Nonfarm Employment, Civilian Employment, Weekly Unemployment Claims for a discussion of "covered employment" and demographics.
Mike "Mish" Shedlock
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