Thursday, February 2, 2012

Unemployment drops to 8.3%--It’s possible.


Gallup says its own measure of unemployment in January rose slightly to 8.6% from 8.5% in December.  However, when Gallup measured at mid-January, unemployment was down to 8.3%.  Gallup’s mid-month reading normally provides a pretty good estimate of the government's unadjusted unemployment rate for the month.

Is it possible we might see a report for January showing unemployment down to 8.3%?  Maybe.  Then again, the feds have revised how the measure unemployment beginning with the January numbers so the previous relationship between Gallup’s mid-month numbers and government numbers may no longer hold.

Most analysts think the official unemployment numbers will stay the same for January at 8.5%.  But, if they tip down again that would be very good news for Obama and the Democrats.

There are a couple of additional signs pointing toward a further decline in unemployment in January.

1. Gallup's Job Creation Index continues to improve, reaching its highest monthly point since September 2008. That should indicate that jobs are being added.

2. Unemployment applications fell 12,000 to a seasonally adjusted 367,000. When applications stay consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

Stay tuned.  Tomorrow’s jobs report should be VERY interesting.

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