Tuesday, October 19, 2010

Unemployment As Measure by Gallup Is Much Higher Than BLS, Suggests Much Higher Numbers Coming on November 5th

Also, underemployment reached 18.8% in September from 18.6% in August, up from 18.4% in July.
This suggests that the next report by the BLS on Nov 5, just after the mid term eelctions,  will be much higher than the previous one.

"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.

However, Gallup's monitoring of job market conditions suggests that there was a sharp increase in the unemployment rate during the last couple of weeks of September. It could be that the anticipated slowdown of the overall economy has potential employers even more cautious about hiring. Some of the increase could also be seasonal or temporary".
"Regardless, the sharp increase in the unemployment rate during late September does not bode well for the economy during the fourth quarter, or for holiday sales. In this regard, it is essential that the Federal Reserve and other policymakers not be misled by Friday's jobs numbers. The jobs picture could be deteriorating more rapidly than the government's job release suggests".

Hat tip to Mish.

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