As the accompanying article explains, part of the reason is that more discouraged workers are entering the job market in August. And there is a difference between how Gallup figures the unemployment rate, and how the BLS calculates it.
But at the very least, unless there is a dramatic turnaround in the next two weeks, unemployment for the month will either stay the same, or rise to as much as 8.7%.
New Gallup unemployment data suggest an increase in the government’s seasonally adjusted unemployment rate for August when it is reported on Friday, Sept. 7. During recent months, Gallup’s measurements have been more optimistic than those of the BLS. Barring a sharp reversal in this relationship, the government’s unadjusted unemployment rate might be expected to stay the same or increase in August.
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.
Just in time for the Democratic convention. Any “bounce” Obama receives from that confab (September 4-6), is likely to land with a thud if the unemployment rate shoots up that much. Even if it rises one or two tenths, that would show the jobs engine moving in the wrong direction for two straight months.
Is the Obama campaign panicking? I’m not buying the “Hillary for Biden” swap story. One guy selling a book relates a hearsay nugget of information that everyone seems to have taken as gospel. Not credible, in my book. Besides, tossing Biden at this point would be even riskier for Obama than the Ryan choice is for Romney. It would call into question his judgment in choosing Biden in the first place, while loading up his campaign with all the Clinton baggage that Bill and Hillary drag around with them.
But rising unemployment so close to an election would bring out enough panic in the Obama campaign that would satisfy any Republican. One might expect the Obama campaign to go nuclear on Romney, making even wilder charges than have been suggested so far. How can you top accusing your opponent of murder? No doubt they can find something else to hang around Romney’s neck as they desperately try to distract the public from their monumental policy failures.