Underemployment Continues to Fall, But Is Still Double Pre-Recession Level

With the jobs numbers released this past Friday, highlighting Gallup's underemployment statistics provides another look into the employment situation in America.  Gallup defines underemployed workers as those who work part-time but desire a full-time job, along with Americans who are simply unemployed. This figure is an important supplement to the BLS' jobs numbers, as it illustrates the lingering frustration within the American economy that is not quite as apparent in Friday's optimistic report.  While underemployment has tailed off in recent months, it's still well above levels seen before the recession.  16.5% of workers are underemployed, down from over 20% in 2010 and 18.1% this time one year ago.  Before the housing bubble burst and drove the economy into a downward spiral unseen since the Great Depression, underemployment had sunk to below 8%, but as companies laid off workers and scaled back domestic operations, Americans were left struggling to find full-time employment, prompting a spike in unemployment and underemployment.  Still, though, the 16.5% underemployment rate is the lowest since the start of the recession, and it continues to steadily drop as the year progresses.  

Underemployment Increases to 19%

 On February 17^th, Gallup released a charttracking underemployment from January 2010 to February 15^th2012.  Gallup calculates underemployment by combining the percent of workers who are unemployed with the percent of workers who are employed at part-time jobs but who have a desire to work full-time.  While this number has dropped from the 20.3% recorded this time two years ago to 19.0% in mid-February 2012, the measure is up significantly from the mid-January figure of 18.0%.  Gallup notes that seasonal factors tend to increase both unemployment and underemployment at this time of year; however, the research organization noted that “underemployment measures show a sharp deterioration in job market conditions since mid-January.”  This increase in underemployment is also consistent with the drop off in Gallup’s Job Creation Index from +16 in January to +13 in mid-February.