The Gallup daily employment numbers are often derided because they are not seasonally adjusted. They also seem to be consistently higher than the figure produced by the Bureau of Labor Statistics (BLS), possibly because they include a slightly different sample and sampling methods.
Nevertheless the year-on-year figures provide some tentative evidence that we are on the verge of a large drop in the US unemployment rate. The current rate estimated by the BLS = 8.3% (February 2012). The data for March 2012 will be released next week at 8.30 EST on Friday April 6th.
The Gallup data is based on a 30-day rolling sample. Today's figure is 8.4% (ie the average for the last 30 days is 8.4%).
http://www.gallup.com/...
The equivalent figure on March 29th 2011 was 10%, a difference of 1.6%. The BLS figure for March 2011 was 8.8%. If Gallup is correct that there has been a 1.6% drop in unemployment over the past year then the BLS figure for March 2012 would be 7.2%.
This is clearly not going to be the case because one also has to factor in the labor force participation rate. Gallup estimates that this has risen by 0.5% in the last 12 months from 63.8% to 64.3%. An equivalent rise in the BLS figure would imply a participation rate of 64.7%, much higher than last month's 63.9%. Rises in the participation rate put pressure on the unemployment rate because it increases the number of people available for work. Not all of the increase in the participation rate translates to an increase in the unemployment rate, but it does create a pressure.
My guess is we are looking at an unemployment rate of 8% next week, possibly even lower. Job creation seems to have been strong this month as evidenced by the weekly claims data. Gallup is indicating a strong year-on-year downward trend. These forces are countered by a steady rise in the participation rate which, though it deflates the headlines somewhat, is also good news.
