Gallup Unemployment Rate Spikes from 7.9% to 8.9% in 20 Days! Sampling Error or Seasonal Effect?


Inquiring minds note the steady rise all month in Gallup's Daily Employment Survey.

  • 7.9% August 1-2
  • 8.0% August 3-6
  • 8.1% August 8-8
  • 8.2% August 9-11
  • 8.3% August 12
  • 8.4% August 13-16
  • 8.6% August 17-18
  • 8.8% August 19
  • 8.9% August 20

Is This a Seasonal Effect?

That's quite a trend. The unemployment rate steadily rose a full percentage point in a mere 20 days.

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Gallup notes "Because results are not seasonally adjusted, they are not directly comparable to numbers reported by the U.S. Bureau of Labor Statistics, which are based on workers 16 and older. Margin of error is ±1 percentage point."

My first inclination was the rise was part of a seasonal trend. However, "each result is based on a 30-day rolling average; not seasonally adjusted".

To see if this was part of a normal seasonal trend, I downloaded the data which dates back to 2010. Let's take a look at an apples-to-apples comparison of August 2013 vs. August in prior years to eliminate any seasonal bias.

August 2010

Date

% Underemployed

% Unemployed

8/1/2010

18.4

8.9

8/2/2010

18.4

8.9

8/3/2010

18.6

8.9

8/4/2010

18.7

9

8/5/2010

18.5

8.8

8/6/2010

18.6

8.9

8/7/2010

18.5

8.9

8/8/2010

18.5

8.9

8/9/2010

18.4

9

8/10/2010

18.4

9.1

8/11/2010

18.5

9.2

8/12/2010

18.6

9.2

8/13/2010

18.6

9.2

8/14/2010

18.5

9.1

8/15/2010

18.3

9.1

8/16/2010

18.2

9

8/17/2010

18.1

9.1

8/18/2010

18.1

9.1

8/19/2010

18.3

9.3

8/20/2010

18.4

9.4

8/21/2010

18.4

9.4

8/22/2010

18.4

9.4

8/23/2010

18.4

9.4

8/24/2010

18.6

9.6

8/25/2010

18.6

9.6

8/26/2010

18.6

9.6

8/27/2010

18.7

9.5

8/28/2010

18.7

9.5

8/29/2010

18.5

9.4

8/30/2010

18.5

9.3

8/31/2010

18.6

9.3

August 2011 

Date

% Underemployed

% Unemployed

8/1/2011

18

8.8

8/2/2011

17.9

8.8

8/3/2011

17.9

8.9

8/4/2011

17.9

8.9

8/5/2011

18.1

9

8/6/2011

18

8.9

8/7/2011

17.9

8.8

8/8/2011

18

8.8

8/9/2011

18

8.8

8/10/2011

18

8.8

8/11/2011

18.1

8.8

8/12/2011

18.1

8.8

8/13/2011

18.2

9

8/14/2011

18.1

8.9

8/15/2011

18.2

9

8/16/2011

18.1

9

8/17/2011

18.2

9

8/18/2011

18

8.9

8/19/2011

18.2

9

8/20/2011

18.2

9.1

8/21/2011

18.1

9

8/22/2011

18.1

9.1

8/23/2011

18.1

9.1

8/24/2011

18.1

9.1

8/25/2011

18.2

9.1

8/26/2011

18.2

9.1

8/27/2011

18.2

9.1

8/29/2011

18.4

9.1

8/30/2011

18.5

9.1

8/31/2011

18.5

9.2

August 2012

Date

% Underemployed

% Unemployed

8/1/2012

17.1

8.2

8/2/2012

17

8.2

8/3/2012

16.9

8.2

8/4/2012

16.8

8.2

8/5/2012

16.6

8

8/6/2012

16.6

8.1

8/7/2012

16.6

8.2

8/8/2012

16.6

8.1

8/9/2012

16.8

8.2

8/10/2012

16.8

8.2

8/11/2012

16.9

8.2

8/12/2012

17

8.3

8/13/2012

16.9

8.3

8/14/2012

17

8.4

8/15/2012

17

8.3

8/16/2012

17.1

8.4

8/17/2012

17

8.3

8/18/2012

17.1

8.3

8/19/2012

17.1

8.4

8/20/2012

17

8.3

8/21/2012

17.2

8.3

8/22/2012

17.3

8.3

8/23/2012

17.2

8.2

8/24/2012

17.2

8.3

8/25/2012

17.2

8.2

8/26/2012

17.2

8.2

8/27/2012

17

8

8/28/2012

17

8

8/29/2012

16.9

7.9

8/30/2012

17.1

8

8/31/2012

17.2

8.1

August 2013 

Date

% Underemployed

% Unemployed

8/1/2013

17.3

7.9

8/2/2013

17.3

7.9

8/3/2013

17.4

8

8/4/2013

17.5

8

8/5/2013

17.5

8

8/6/2013

17.4

8

8/7/2013

17.3

8.1

8/8/2013

17.4

8.1

8/9/2013

17.4

8.2

8/10/2013

17.5

8.2

8/11/2013

17.5

8.2

8/12/2013

17.5

8.3

8/13/2013

17.6

8.4

8/14/2013

17.6

8.4

8/15/2013

17.5

8.4

8/16/2013

17.4

8.4

8/17/2013

17.6

8.6

8/18/2013

17.7

8.6

8/19/2013

17.8

8.8

8/20/2013

17.9

8.9

No, It's Not Seasonal

A close look at August 2013 vs. August in prior years shows no other strong seasonal spikes.

2010 did show a half percentage point rise August 1-20, but that was at a time when BLS unemployment rates were rising as well. 2011 sported a 0.3 percentage point rise August 1-20 and 2012 had an insignificant 0.1 percentage point rise August1-20.

This upward trend is steady, stronger, more persistent, and with a unique divergence to BLS reported data as compared to prior years. Whatever is going on, it's not a typical seasonal pattern. 

What About Sampling Error? 

Even though Gallup states the "margin of error is ±1 percentage point", my interpretation is the margin pertains to the results in any one survey, not trends that strengthen in one direction for 20 straight days. 

As Nate Silver proved in the last presidential election, repeated surveys and trends are important.

For details, please see my confident prediction.

Expect a Jump in BLS Reported Unemployment

In this case, there is only one pollster, but given no history of bias by Gallup, and given the steady, significant rise in polled unemployment, I would expect to see a similar jump in the BLS unemployment rate unless the Gallup trend reverses significantly, and soon.

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