There is a caveat, to be sure, but Gallup recently reported that by their calculations, the official unemployment rate could be headed below 9 percent in October.
There’s even more potential good news: part-time workers seeking employment fell to 9.2 percent from 9.6 percent in September and underemployment (the unemployed plus those working part time who want full-time work) declined from 18.3 percent to 17.5 percent, according to Gallup’s figures.
Now, the caveat: As Gallup points out, its data is different from the federal employment report because it is not seasonally adjusted. What does that mean?
Halloween has become the third-largest sales season for many retailers, who are likely increasing their staffing accordingly. In addition, some stores may have been minimally staffed and are beginning early to add employees for the holidays. The surge on Wall Street during early October may also have provided some relief for business owners as they evaluate the prospects of the U.S. economy and their potential sales.
Gallup isn’t guaranteeing a drop in the unemployment rate. In addition to the seasonally adjusted difference, Gallup’s methodology and that of the official government stats vary. Some of the differences include such things as frequency of data collection (Gallup gathers more frequently), Gallup’s survey includes 18 and older, the Labor Department includes 16 and older, and the Labor Department draws from 60,000 households vs. Gallup’s 30,000 individuals.
But the bottom line is this: When looking at the history of Gallup data compared to the official Bureau of Labor Statistics information, a drop below 9 percent in the national unemployment rate isn’t out of the question.
Will it stay below 9 percent?
Last month, the Congressional Budget Office, predicted the unemployment rate would hover around 9 percent for the next year or so. “With modest growth in output, CBO expects employment to expand very slowly during the rest of this year and next year,” CBO Director Douglas Elmendorf told Congress. “As a result, the unemployment rate is likely to be around 9.0 percent through the fourth quarter of next year.”