Contradictory Data on Employment

Most information about the employment situation in the United States shows that a rise in joblessness already has begun. GDP growth has fallen. Uncertainly about taxes in 2013 has made it unlikely that employers will add people for the balance of 2012, at least. An increase in the corporate tax rate may make the situation worse.

Gallup has released the results of a new poll that challenge the conventional thinking about jobs. There is reason to be more optimistic about employment trends, if the research firm’s conclusions are right.

According to Gallup’s new report:

U.S. workers reported essentially no change in net hiring at their workplaces in June, with the Gallup Job Creation Index averaging +20 for the month, similar to the +19 recorded in May and identical to the +20 in April. The index continues to hold at levels that are the most positive since mid-2008.

The confidence businesses lost in the recession has almost passed. And Gallup information shows that through June, at least, the possible increase in business taxes has not yet prompted deep worry.

The Gallup reports adds:

The Job Creation Index in June reflects 36% of U.S. adult workers saying their employers are hiring and expanding the size of their workforces, and 16% saying their employers are letting workers go and reducing the size of their workforces. Both components of the index have also been steady since April.

Obviously, either many economists are wrong, or Gallup’s survey has flaw. If Gallup polls show that these trends continue into the third quarter, the likelihood of a recession should drop.

Methodology: Results are based on telephone interviews conducted as part of Gallup Daily tracking June 1 to 30, 2012, with a random sample of 16,871 employed adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre