Gallup: Unemployment rate back over 10%

In yet another harbinger of tomorrow’s official jobless report, Gallup shows a sharp increase in unemployment for September, pushing their estimate of joblessness to 10.1%.  The pollster also warns that tomorrow’s figure will miss some of the change, which will likely lull some into a sense that no action is needed:

Unemployment, as measured by Gallup without seasonal adjustment, increased to 10.1% in September — up sharply from 9.3% in August and 8.9% in July. Much of this increase came during the second half of the month — the unemployment rate was 9.4% in mid-September — and therefore is unlikely to be picked up in the government’s unemployment report on Friday. …

The government’s final unemployment report before the midterm elections is based on job market conditions around mid-September. Gallup’s modeling of the unemployment rate is consistent with Tuesday’s ADP report of a decline of 39,000 private-sector jobs, and indicates that the government’s national unemployment rate in September will be in the 9.6% to 9.8% range. This is based on Gallup’s mid-September measurements and the continuing decline Gallup is seeing in the U.S. workforce during 2010.

The underemployment number should remain steady, Gallup predicts, but not because businesses are hiring.  Gallup predicts that their equivalent to the U-6 number will hit between 18.6% and 18.8% because they see fewer people working part-time but looking for full-time employment.  More part-timers had their positions converted to full time, but businesses aren’t hiring part-timers to add to their staffs now.

This has implications beyond employment or the elections, too.  With unemployment rising again, the upcoming holiday season could be another disaster like 2008.  Job insecurity will result in more savings and more frugality in a season that makes or breaks retail businesses.  The pending tax hikes will also have some with cash less likely to part with it as well.  With that in mind, retailers are going to hire fewer people this holiday season in anticipation of lower demand, and Gallup warns this will mean a brutal fourth quarter for the economy.

At the same time, the Department of Labor announced that initial jobless claims fell for the third straight week to a four-month low at 445,000.  This hits at the lower end of the range seen for all of 2010, so it’s not exactly “unexpected.”  It does, however, mean that either Gallup’s data doesn’t account entirely for the job swings, or that Gallup’s data is more recent on job losses and we can expect to see the jobless claims start to rise again in the next couple of weeks, as those who lost their jobs in the final two weeks become eligible to apply for benefits.

With all of the predictors in place, where do you think the jobless rate will be tomorrow morning?  Take the poll: