Gallup poll suggests spike in unemployment for February

Barack Obama has had some good news on the employment front the last couple of months.  Net job creation has outpaced population growth, although not nearly enough to make a dent in the chronically unemployed, and economic indicators have mostly been positive if unspectacular.  Gallup’s latest mid-month survey on employment shows potential storm clouds on the horizon, however:

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The U.S. unemployment rate, as measured by Gallup without seasonal adjustment, is 9.0% in mid-February, up from 8.6% for January. The mid-month reading normally reflects what the U.S. government reports for the entire month, and is up from 8.3% in mid-January. …

Underemployment, a measure that combines the percentage of workers who are unemployed with the percentage working part time but wanting full-time work, is 19.0% in mid-February. This is higher than the 18.7% recorded for January, and is up significantly compared with January’s mid-month reading of 18.1%.

Something appears to be happening in the last few weeks to push employment back down in Gallup’s survey, usually a good if not exact indicator of official trends from the BLS.  It’s unclear what that might be, although it probably relates to current and anticipated demand.  The advance GDP report for 2011Q4 was a decent 2.8%, but the real final sales number was under 1%, which indicates inventory inflation and signals lower output in succeeding quarters, and also indicates flagging demand.

The other possibility is the anticipated rise in energy prices, especially in gasoline.  That will have a corrosive effect on disposable income in two directions — directly at the pump, where it will cost more for consumers to come to market, and on the prices of goods at the market when they arrive.  That will lower demand even further, as seen in the rapid rise of gas prices at this time last year.  Businesses might be bracing for this by postponing replacement hiring or trimming staff, especially with CBO outlooks for growth this year and next being 2.0% and 1.1%, respectively.

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We’re two weeks away from the February employment report, but this precursor from Gallup isn’t good news at all.  We’ll see if it’s an outlier this month, or a warning.

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