From Gallup…The U.S. government’s January unemployment rate that it will report Friday morning will be based largely on mid-month conditions. At mid-month, Gallup reported that its unemployment rate had declined to 8.3%, based on data collected through the 15th of the month.
The mid-month reading normally provides a pretty good estimate of the government’s unadjusted unemployment rate for the month. However, the government is revising its methodology beginning with the January 2012 report. As a result, the government notes, “household survey data for January 2012 will not be directly comparable with that for December 2011 or earlier periods.” In turn, this makes estimating the government’s unemployment rate for January even more difficult than usual.
Regardless of what the government reports, Gallup’s unemployment and underemployment measures show deterioration since mid-January. While the unemployment rate of 8.6% for January is up only modestly from December, this overall increase subsumes the more negative trend of the most recent weeks. In turn, this also seems consistent with Wednesday’s ADP report showing less job growth in January than in the prior month.