Potentially Bad News For August Jobs Report
A mid-month survey from Gallup portends some potentially bad news for the August jobs report that will come out just days after the Democratic National Convention ends:
Gallup’s Daily tracking of the unemployment situation is based on interviews with more than 30,000 adults over the 30 days ending Aug. 15, and shows essentially no change in the unadjusted unemployment rate at 8.3% compared to 8.2% in July. In turn, this suggests that the government’s unadjusted unemployment rate could increase to 8.7% in July from 8.6% in June. The government’s measurement of the unadjusted unemployment rate has been known to differ with Gallup’s findings, but a drop of 0.3% in July is necessary to bring the government’s unadjusted rate down to Gallup levels.
More interestingly, there were no BLS seasonal adjustments in August 2011. If this remains the same in 2012, the Gallup seasonally adjusted unemployment rate for August would be 8.3% while that of the BLS would be 8.7%, assuming a similar increase to that shown in the Gallup data. Further, Gallup’s data show the labor force participation rate to be increasing in August. In turn, that could have an additional negative impact on the unemployment rate for August if the government’s data show a similar pattern.
Regardless, barring heroic adjustments or a sharp change in direction, Gallup data suggest the seasonally adjusted U.S. unemployment rate for August will increase — possibly substantially — when announced in early September.
A two or three tenths-of-a-point increase in the unemployment rate two months before the election would obviously be bad news for the Obama Administration, especially if it comes right as the final drive to November is beginning.