U.S. Payroll to Population Rate 43.9% in February
Monday, March 9th, 2015
The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, was 43.9% in February. This is statistically similar to the 44.1% measured in January, but it is the highest measurement of P2P for any February since Gallup began tracking the metric daily in 2010. February is typically one of the lowest months for P2P in any year, and the downward trend over the past few months fits the normal seasonal pattern.
Gallup's P2P metric tracks the percentage of the U.S. adult population aged 18 and older who are employed by an employer for at least 30 hours per week. P2P is not seasonally adjusted. The latest results are based on Gallup Daily tracking interviews with 26,843 Americans, conducted Feb. 2-28 by landline telephone and cellphone. Gallup does not count adults who are self-employed, work fewer than 30 hours per week, who are unemployed or are out of the workforce as payroll-employed in the P2P metric.
Workforce Participation Continues Growth to 67.0%
Workforce participation among U.S. adults rose slightly from 66.7% in January to 67.0% in February. Workforce participation measures the percentage of adults aged 18 and older who are working, or who are not working but are actively looking for work and are available for employment.
Since February 2010, the workforce participation rate has ranged narrowly between lows of 65.8% and highs of 68.5%, but since mid-2013 has most often registered at or below 67%. Rising workforce participation may be a sign of improving labor market expectations among Americans who would prefer to be working but have refrained from even looking for work. While Gallup only began recording this metric in January 2010, Bureau of Labor Statistics numbers show that labor force participation before the 2008 financial crisis was three percentage points higher than it is today, and has yet to recover from that initial decline.
Unemployment Down to 6.7%
Gallup's U.S. unemployment rate represents the percentage of adults in the workforce who did not have any paid work in the past seven days, for an employer or themselves, and who were actively looking for and available to work. Gallup's unadjusted U.S. unemployment rate fell 0.4 points to 6.7% in February, similar to the 0.6-point fall in February 2014.
Unlike Gallup's P2P rate, which is a percentage of the total population, traditional employment metrics -- such as the unemployment rates Gallup and the U.S. Bureau of Labor Statistics (BLS) report -- are based on the percentage of the workforce. While both Gallup and BLS data are based on robust surveys, the two have important methodological differences. Additionally, the primary unemployment rate released by the BLS each month is seasonally adjusted. Although Gallup's employment numbers highly relate to BLS rates, Gallup's numbers tend to have more month-to-month variability, and the unemployment rate that the BLS reports each month does not always track precisely with the Gallup estimate.
Underemployment Up at 16.2%
Gallup's measure of underemployment in February is 16.2%, up from the level registered in January, but still lower than what Gallup has measured in prior years. Gallup's U.S. underemployment rate combines the percentage of adults in the workforce who are unemployed (6.7%) and those who are working part time but desire full-time work (9.5%). While Gallup's measure of unemployment fell in February, the percentage working part time but who want full- time work rose slightly faster at the same time, resulting in a 0.4-point increase in the underemployment rate.
Though P2P registered a nominal decline of 0.2 percentage points, 43.9% still represents a relatively strong P2P number for February and continues a trend of positive employment news. Similarly, the rise in underemployment this past month is also partly related to the rise in the number of Americans who were previously considered out of the workforce and who are now looking for new jobs. Though, admittedly, they would prefer to be working more than they currently are, these individuals are at least mobilized and engaged in some type of productive work. If the employment situation continues to strengthen over the next few months, more of these underused workers may join the ranks of the full-time employed.