Gallup: Unemployment Rate Is 8.6 Percent for August

Friday, 23 Aug 2013 10:12 AM

By Michelle Smith

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As usual, market participants are anxious to lay eyes on the next employment report from the Bureau of Labor Statistics (BLS). But data from Gallup has sparked concern about what the government's report will reveal.

BLS isn't the only organization tracking employment. Gallup also assesses the nation's labor conditions, and according to its data, unemployment rose from 7.8 percent in July to 8.6 percent in August, a jump CNBC describes as "startling."

When including the individuals who are underemployed, Gallup reports a staggering unemployment rate of 17.7 percent.

Editor’s Note:
Obama Donor Banned This Message (Shocking)

Compare that to government figures from July, when the jobless rate was 7.4 percent, or 14 percent when including the underemployed and those who have quit looking, and it seems that there has been a sudden surge in unemployment.

Gallup's data is based on a 30-day rolling average. The organization says, "because results are not seasonally adjusted, they are not directly comparable to numbers reported by the U.S. Bureau of Labor Statistics, which are based on workers 16 and older." Gallup tracks data on people 18 and older.

The unemployment umbers from the BLS and Gallup have been fairly close for most of the year, according to CNBC. In April, Gallup even reported an unemployment rate that was lower than that from the government.

The 8.6 percent number is the highest level Gallup has reported since the 9.1 percent in February 2012, CNBC notes. While Gallup's numbers can be volatile, they have portended rises in the official rate.

"The BLS method is statistically more rigorous. With the Gallup, you're basically doing a poll," Jacob Oubina, senior economist at RBC Capital Markets, tells CNBC.

"The Gallup [number] is more of a sentiment-type indicator. Either way, the unemployment rate doesn't really give you a good indicator of the true state of the labor backdrop," he explains.

But, according to The Associated Press, weekly jobless claims suggest the labor market improved in August.

Last week, applications for unemployment benefits rose, after reaching the lowest level in 5 ½ years. But, the four-week average fell, marking the sixth consecutive decline, AP says.

Over the past month, the four-week average has fallen 5 percent. These declines suggest employers added nearly 200,000 in August, an improvement from the 162,000 added in July.

And, since applications for unemployment generally reflect layoffs, the broader trend suggests companies are laying off fewer workers and could step up hiring in the months ahead, AP reports.

The state of the labor market is an extremely sensitive issue since it's linked to decisions about Federal Reserve policy, such as when it's appropriate to cut stimulus and raise interest rates.

If the Fed takes Gallup's data into account, the discussions at the September Open Markets Committee meeting over tapering could take on a different tone, says CNBC.

Editor’s Note: Obama Donor Banned This Message (Shocking)

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