Poll Watch: U.S. Unemployment Falls to 9.4% But Underemployment Increases to 19.3%
Unemployment, as measured by Gallup without seasonal adjustment, fell to 9.4% at the end of April from 9.6% in mid-April and 9.9% at the end of March. Unemployment is now at its lowest level of 2011 and is lower than the 9.6% at the end of April last year.
So, should Americans be reassured that the economy is turning around?
Well, perhaps, since a broader unemployment measure remained high in April.
The decline in unemployment since late March was not enough to offset the increase in those working part time but wanting full-time work. As a result, the combined underemployment measure was 19.3% at the end of April — essentially the same as the 19.2% in mid-April and slightly higher than the 19.0% at the end of March. Underemployment is now higher than the 18.9% at the end of April a year ago.
Here is the graph:
While the unemployment rate has decreased a little, there are more Americans only working part-time while they desire full-time work. Some work is better than no work but the implications are clear – people will remain disgruntled – especially at the ballot box.
There has been a relatively modest decline in unemployment over the first four months of 2011, and that improvement may be at least partly the result of seasonal hiring factors. There was a similar downward trend in Gallup’s not-seasonally adjusted unemployment measure over the same four-month period in 2010. This similarity in trends also holds for Gallup’s Job Creation Index and broader underemployment over the same time frames.
These trends are consistent with the Challenger report for April that showed fewer workers being let go than in March and slightly fewer than in April a year ago, and the ADP report that found a less-than-expected 179,000 increase in private-sector hiring during April. While layoffs are down, businesses continue to hold back on their hiring in the U.S.
Although the jobs situation has been relatively flat in 2011 — not much better than in 2010 and with an increasing number of people working part time but wanting full-time work — even marginal job growth is good, given the slow growth of the first quarter of this year. At a time when the U.S. economy is facing numerous economic headwinds, including plummeting consumer confidence and soaring food and gas prices, the challenge may be to maintain this performance during the months ahead.