While the BLS unemployment number, fudged strategically to lower the denominator, or the total labor force, may have come well better than expected (as somehow miraculously ever more people find the shadow economy a more hospitable place where to make their money and drop off the BLS roll forever) we once again go to that trusty fallback, the monthly Gallup poll of underemployment. What we find here is rather different from what the BLS, and the administration would like us to believe, namely that "underemployment, a measure that combines the percentage of workers who are unemployed with the percentage working part time but wanting full-time work, is 18.1% in November, as measured by Gallup without seasonal adjustment. That is up from 17.8% a month ago and 17.2% a year ago." Said simply, "many employers appear to have chosen to hire part-time rather than full-time employees for this holiday season." Naturally, this should come as no surprise: it was first discussed here in May, when we said: "As the attached chart shows, since the start of the depression, America has lost 9.1 million full time jobs, offsetting this by a gain of 2.3 million part time jobs. No need to outsource to Asia any more: America now outsources jobs to temp agencies. And so the transition of America into a part-time worker society, first discussed in December of 2010 continues." (the attached chart can be seen here). As for the Gallup chart which comes from the real economy, not from some seasonally fudged, birth/death adjusted grotesque model deep in the bowels of 2 Massachusetts Ave NE Washington, here it is.
So why is this rise in underemployment a bad thing? For all the wrong reasons:
Increasing Underemployment May Imply Future Layoffs
Gallup's underemployment data suggest that today's employers are increasingly relying on part-time employees who would prefer to work full time. A year-over-year comparison shows that the 0.3-percentage-point drop in the unemployment rate is more than offset by the increase of 1.2 points in the percentage of those who work part time but want full-time work. The unemployment rate appears to have improved over the past year largely because Americans are taking part-time work when they can't get full-time jobs.
This worsening of the underemployment situation is worrisome not just because more Americans are not able to get the full-time jobs they want, but because of what it may imply about employer attitudes. Economic uncertainty may have many employers hiring part-time instead of full-time workers, and/or temporary workers instead of permanent ones. In turn, this could mean that many of those who had part-time or temporary work in November could see those jobs disappear early next year.
In other words, contrary to simplistic headline charts, the number one data series that pundits should be focusing on, is the subset of persons "who currently want a job." Indicatively, as we showed on Friday, this just hit an all time high... even according to the BLS: